EXHIBIT 10.4
[LOGO] TERM LOAN AND SECURITY AGREEMENT
TERM LOAN AND SECURITY AGREEMENT NO. 0003552001 ("Loan Agreement") dated as of
March 29, 2000. between X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION
LABORATORY, a corporation organized and existing under the laws of the State of
New York having its principal office at 184-13 Xxxxxx Xxxxxxx Expressway, Xxxxx
Xxxxxxx, XX 00000 ("Customer"). and XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES
INC., a corporation organized and existing under the laws of the State of
Delaware having its principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx XX
00000 ("MLBFS").
In consideration of the mutual covenants of the parties hereto, Customer and
MLBFS hereby agree as follows:
Article I. DEFINITIONS
1.1 Specific Terms. In addition to terms defined elsewhere in this Loan
Agreement, when used herein the following terms shall have the following
meanings:
(a) "Account Debtor" shall mean any party who is or may become obligated with
respect to an Account or Chattel Paper.
(b) "Additional Agreements" shall mean all agreements, instruments, documents
and opinions other than this Loan Agreement, whether with or from Customer or
any other party, which are contemplated hereby or otherwise reasonably required
by MLBFS in connection herewith, or which evidence the creation, guaranty or
collateralization of any of the Obligations or the granting or perfection of
liens or security interests upon the Collateral or any other collateral for the
Obligations, and shall include, without limitation, the Note.
(c) "Bankruptcy Event" shall mean any of the following: (i) a proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt or
receivership law or statute shall be filed or consented to by Customer or any
Guarantor; or (ii) any such proceeding shall be filed against Customer or any
Guarantor and shall not be dismissed or withdrawn within sixty (60) days after
filing; or (iii) Customer or any Guarantor shall make a general assignment for
the benefit of creditors; or (iv) Customer or any Guarantor shall generally fail
to pay or admit in writing its inability to pay its debts as they become due; or
(v) Customer or any Guarantor shall be adjudicated a bankrupt or insolvent.
(d)"Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day on which the New York Stock Exchange is regularly closed.
(e)"Closing Date" shall mean the date upon which all conditions precedent to
MLBFS' obligation to make the Loan shall have been met to the satisfaction of
MLBFS.
(f)"Collateral" shall mean all Accounts, Chattel Paper, Contract Rights,
Inventory, Equipment, Fixtures, General Intangibles, Deposit Accounts,
Documents, Instruments, Investment Property and Financial Assets of Customer,
howsoever arising, whether now owned or existing or hereafter acquired or
arising, and wherever located; together with all parts thereof (including spare
parts), all accessories and accessions thereto, all books and records (including
computer records, directly related thereto, all proceeds thereof (including,
without limitation, proceeds in the form of Accounts and insurance proceeds),
and the additional collateral described in Section 3.6 (b) hereof.
(g) "Commitment Expiration Date" shall mean April 28,2000.
(h) "Commitment Fee" shall mean a fee of $1,500.00 due to MLBFS in connection
with this Loan Agreement.
(i) "Default" shall mean either an "Event of Default" as defined in Section 3.5
hereof, or an event which with the giving of notice, passage of time, or both,
would constitute such an Event of Default.
(j) "General Funding Conditions" shall mean each of the following conditions to
each loan or advance by MLBFS hereunder: (i) no Default shall have occured and
be continuing or would result from the making of any such loan or advance
hereunder by MLBFS. (ii) there shall not have occurred and be continuing any
material adverse change in the business or financial condition of Customer or
any Guarantor: (iii) all representations and warranties of Customer or any
Guarantor herein or in any Additional Agreements shall then be true and correct
in all material respects; (iv) MLBFS shall have received this Loan Agreement and
all Additional Agreements, duly executed and filed or recorded where applicable,
all of which shall be in form and substance reasonably satisfactory to MLBFS;
(v) the Commitment Fee shall have been paid in full; (vi) MLBFS shall have
received, as and to the extent applicable, copies of invoices, bills of sale,
loan payoff letters and/or other evidence reasonably satisfactory to it that the
proceeds of the Loan will satisfy the Loan Purpose (vii) MLBFS shall have
received evidence reasonably satisfactory to it as to the ownership of the
Collateral and the perfection and priority of MLBFS liens and security interests
thereon, as well as the ownership of and the perfection and priority of MLBFS'
liens and security interests on any other collateral for the Obligations
furnished pursuant to any of the Additional Agreements; (viii) MLBFS shall have
received evidence reasonably satisfactory to it of the insurance required hereby
or by any of the Additional Agreements; and (ix) any additional conditions
specified in the "Term Loan Approval" letter executed by MLBFS with respect to
the transactions contemplated hereby shall have been met to the reasonable
satisfaction of MLBFS.
(k) "Guarantor" shall mean a person or entity who has either guaranteed or
provided collateral for any or all of the Obligations.
(l) "Loan" shall mean a four-year term installment loan in an amount equal to
the lesser of: (A) 100% of the amount required by Customer to satisfy or fulfill
the Loan Purpose, (B) the aggregate amount which Customer shall request be
advanced by MLBFS on account of the Loan Purpose or (C) $150,000.00.
(m) "Loan Purpose* shall mean the purpose for which the proceeds of the Loan
will be used; to wit: to refinance a portion of Customer's WCMA Line of Credit
No. 862-07N67.
(n) "Location of Tangible Collateral" shall mean the address of Customer set
forth at the begging of this Loan Agreement, together with any other address or
addresses set forth on an exhibit hereto as being a Location of Tangible
Collateral.
(o) "Obligations" shall mean ail liabilities, indebtedness and obligations of
Customer to MLBFS, howsoever created, arising or evidenced, whether now existing
or hereafter arising, whether direct or indirect, absolute or contingent, due or
to become due. primary or secondary or joint or several, and, without limiting
the foregoing, shall include interest accruing after the filing of any petition
in bankruptcy and all present and future liabilities, indebtedness and
obligations of Customer under the Note and this Loan Agreement.
(p) "Permitted Liens" shall mean with respect to the Collateral: (i) liens for
current taxes not delinquent, other non-consensual liens arising in the ordinary
course of business for sums not due, and, if MLBFS' rights to and interest in
the Collateral are not materially and adversely affected thereby, any such liens
for taxes or other non-consensual liens arising in the ordinary course of
business being contested in good faith by appropriate proceedings; (ii) liens in
favor of MLBFS; (iii) liens which will be discharged with the proceeds of the
initial WCMA Loan; and (iv) any other liens expressly permitted in writing by
MLBFS.
1.2 Other Terms. Except as otherwise defined herein, all terms used in this Loan
Agreement which are defined in the Uniform Commercial Code of Illinois ("UCC")
shall have the meanings set forth in the UCC.
Article II. THE LOAN
2.1 Commitment. Subject to the terms and conditions hereof, MLBFS hereby agrees
to make the Loan to Customer for the Loan Purpose, and Customer agrees to borrow
all amounts borrowed to satisfy the Loan Purpose from MLBFS. The entire proceeds
of the Loan shall be disbursed on the Closing Date either directly to the
applicable third party or parties on account of the Loan Purpose or to reimburse
Customer for amounts directly expended by it; all as directed by Customer in a
Closing Certificate to be executed by Customer and delivered to MLBFS prior to
the Closing Date.
2.2 Note. The Loan will be evidenced by and repayable in accordance with that
certain Collateral Installment Note made by Customer payable to the order of
MLBFS and issued pursuant to this Loan Agreement (the 'Note'). The Note is
hereby incorporated as a part hereof as if fully set forth herein.
2.3 Conditions of MLBFS' Obligation. The Closing Date and MLBFS' obligation to
make the Loan on the Closing Date are subject to the prior fulfillment of each
of the following conditions: (a) MLBFS shall have received a written request
from Customer that the Loan be funded in accordance with the terms hereof,
together with a written direction from Customer as to the method of payment and
payee(s) of the proceeds of the Loan, which request and direction shall have
been received by MLBFS not less than two Business Days prior to any requested
funding date; (b) MLBFS shall have received a copy of invoices, bills of sale,
payoff letters or other applicable evidence reasonably satisfactory to it that
the proceeds of the Loan will satisfy or fulfill the Loan Purpose; (c) the
Commitment Expiration Date shall not then have occurred; and (d) each of the
General Funding Conditions shall then have been met or satisfied to the
reasonable satisfaction of MLBFS.
2.4 Use of Loan Proceeds. The proceeds of the Loan shall be used by Customer
solely for Loan Purpose, or, with the prior written consent of MLBFS, for other
lawful business purposes of Customer not prohibited hereby. Customer agrees that
under no circumstances will the proceeds of the Loan be used: (a) for personal,
family or household purposes of any person whatsoever, or (b) to purchase, carry
or trade in securities, or repay debt incurred to purchase, carry or trade in
securities, or (c) unless otherwise consented to in writing by MLBFS, to pay any
amount to Xxxxxxx Xxxxx and Co., Inc. or any of its subsidiaries, other xxxx
Xxxxxxx Xxxxx Bank USA, Xxxxxxx Xxxxx Bank & Trust Co. or any subsidiary of
either of them (including MLBFS and Xxxxxxx Xxxxx Credit Corporation).
2.5 Commitment Fee. In consideration of the agreement by MLBFS to extend the
Loan to Customer in accordance with and subject to the terms hereof. Customer
has paid or shall, on or before the Closing Date pay, the Commitment Fee to
MLBFS. Customer acknowledges and agrees that the Commitment Fee has been fully
earned by MLBFS and that it will not under any circumstances be refundable.
Article III. GENERAL PROVISIONS
3.1 REPRESENTATIONS AND WARRANTIES
Customer represents and warrants to MLBFS that:
(a) Organization and Existence. Customer is a corporation, duly organized and
validly existing in good standing under the laws of the State of New York and is
qualified to do business and in good standing in each other state where the
nature of its business or the property owned by it make such qualification
necessary.
(b) Execution, Delivery and Performance. The execution, delivery and performance
by Customer of this Loan Agreement and by Customer and each Guarantor of such of
the Additional Agreements to which it is a party: (i) have been duly authorized
by all requisite action, (ii) do not and will not violate or conflict with any
law or other governmental requirement, or any of the agreements, instruments or
documents which formed or govern Customer or any such Guarantor, and (iii) do
not and will not breach or violate any of the provisions of, and will not result
in a default by Customer or any such Guarantor under any other agreement,
instrument or document to which it is a party or by which it or its properties
are bound.
(c) Notices and Approvals. Except as may have been given or obtained, no notice
to or consent or approval of any governmental body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by Customer or any
Guarantor of such of this Loan Agreement, the Note and the other Additional
Agreements to which it is a party.
(d) Enforceability. This Loan Agreement, the Note and such of the other
Additional Agreements to which Customer or any Guarantor is a party are the
respective legal, valid and binding obligations of Customer and such Guarantor,
enforceable against it or them, as the case may be, in accordance with their
respective terms, except as enforceability may be limited by bankruptcy and
other similar laws affecting the rights a creditors generally or by general
principles of equity.
(e) Collateral. Except for any Permitted Liens: (i) Customer has good and
marketable title to the Collateral, (ii) none of the Collateral is subject to
any lien, encumbrance or security interest, and (iii) upon the filing of all
Uniform Commercial Code financing statements executed by Customer with respect
to the Collateral in the appropriate jurisdiction(s) and/or the completion of
any other action required by applicable law to perfect its liens and security
interests, MLBFS will have valid and perfected first liens and security
interests upon all of the Collateral.
(f) Financial Statements. Except as expressly set forth in Customer's financial
statements, all financial statements of Customer furnished to MLBFS have beer
prepared in conformity with generally accepted accounting principles,
consistently applied, are true and correct in all material respects, and fairly
present the financial condition of it as at such dates and the results of its
operations for the periods then ended (subject, in the case of interim unaudited
financial statements, to normal year-end adjustments); and since the most recent
date covered by such financial statements, there has been no material adverse
change in any such financial condition or operation. All financial statements
furnished to MLBFS of any Guarantor are true and correct in all material
respects and fairly represent such Guarantor's financial condition as of the
date of such financial statements, and since the most recent date of such
financial statements, there has been no material adverse change in such
financial condition.
(g) Litigation. No litigation, arbitration, administrative or governmental
proceedings are pending or, to the knowledge of Customer, threatened against
Customer or any Guarantor, which would, if adversely determined, materially and
adversely affect the liens and security interests of MLBFS hereunder or under
any of the Additional Agreements, the financial condition of Customer or any
such Guarantor or the continued operations of Customer.
(h) Tax Returns. All federal, state and local tax returns, reports and
statements required to be filed by Customer and each Guarantor have been filed
with the appropriate governmental agencies and all taxes due and payable by
Customer and each Guarantor have been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely affect either the
liens and security interests of MLBFS hereunder or under any of the Additional
Agreements, the financial condition of Customer or any Guarantor, or the
continued operations of Customer).
(i) Collateral Location. All of the tangible Collateral is located at a Location
of Tangible Collateral.
(j) No Outside Broker. Except for employees of MLBFS, MLPF&S or one of their
affiliates, Customer has not in connection with the transactions contemplated
hereby directly or indirectly engaged or dealt with, and was not introduced or
referred to MLBFS by, any broker or other loan arranger.
Each of the foregoing representations and warranties: (i) has been and will be
relied upon as an inducement to MLBFS to make the Loan, and (ii) is continuing
and shall be deemed remade by Customer on the Closing Date.
3.2 FINANCIAL AND OTHER INFORMATION
(a) Customer shall furnish or cause to be furnished to MLBFS during the term of
this Loan Agreement all of the following:
(i) Annual Financial Statements. Within 120 days after the dose of each fiscal
year of Customer, a copy of the annual reviewed financial statements of
Customer, including in reasonable detail, a balance sheet and statement of
retained earnings as at the close of such fiscal year and statements of profit
and loss and cash flow for such fiscal year;
(ii) Interim Financial Statements. Within 45 days after the close of each fiscal
quarter of Customer, a copy of the interim financial statements of Customer for
such fiscal quarter (including in reasonable detail both a balance sheet as of
the close of such fiscal period, and statement of profit and loss for the
applicable fiscal period); and
(iii) Other Information. Such other information as MLBFS may from time to time
reasonably request relating to Customer any Guarantor or the Collateral.
(b) General Agreements With Respect to Financial Information. Customer agrees
that except as otherwise specified herein or otherwise agreed to in writing by
MLBFS: (i) all annual financial statements required to be furnished by Customer
to MLBFS hereunder will be prepared by either the current independent
accountants for Customer or other independent accountants reasonably acceptable
to MLBFS, and (ii) all other financial information required to be furnished by
Customer to MLBFS hereunder will be certified as correct in all material
respects by the party who has prepared such information, and, in the case of
internally prepared information with respect to Customer, certified as correct
by its chief financial officer.
3.3 OTHER COVENANTS
Customer further agrees during the term of this Loan Agreement that:
(a) Financial Records; Inspection. Customer will: (i) maintain at its principal
place of business complete and accurate books and records, and maintain all of
its financial records in a manner consistent with the financial statements
heretofore furnished to MLBFS, or prepared on such other basis as may be
approved in writing by MLBFS; and (ii) permit MLBFS or its duly authorized
representatives, upon reasonable notice and at reasonable times, to inspect its
properties (both real and personal), operations, books and records.
(b) Taxes. Customer and each Guarantor will pay when due all taxes, assessments
and other governmental charges, howsoever designated, and all other liabilities
and obligations, except to the extent that any such failure to pay will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements, the financial condition of
Customer or any Guarantor or the continued operations of Customer.
(c) Compliance With Laws and Agreements. Neither Customer nor any Guarantor will
violate any law, regulation or other governmental requirement, any judgment or
order of any court or governmental agency or authority, or any agreement,
instrument or document to which it is a party or by which it is bound, if any
such violation will materially and adversely affect either the liens and
security interests of MLBFS hereunder or under any of the Additional Agreements,
the financial condition of Customer or any Guarantor, or the continued
operations of Customer.
(d) No Use of Xxxxxxx Xxxxx Name. Except upon the prior written consent of
MLBFS, neither Customer nor any Guarantor will directly or indirectly publish,
disclose or otherwise use in any advertising or promotional material, or press
release or interview, the name, logo or any trademark of MLBFS, MLPF&S, Xxxxxxx
Xxxxx and Co., Incorporated or any of their affiliates.
(e) Notification By Customer. Customer shall provide MLBFS with prompt written
notification of: (i) any Default; (ii) any materially adverse change in the
business, financial condition or operations of Customer; (iii) any information
which indicates that any financial statements of Customer or any Guarantor fail
in any material respect to present fairly the financial condition and results of
operations purported to be presented in such statements; and (iv) any change in
Customer's outside accountants. Each notification by Customer pursuant hereto
shall specify the event or information causing such notification, and, to the
extent applicable, shall specify the steps being taken to rectify or remedy such
event or information.
(f) Notice of Change. Customer shall give MLBFS not less than 30 days prior
written notice of any change in the name (including any fictitious name) or
principal place of business or residence of Customer or any Guarantor.
(g) Continuity. Except upon the prior written consent of MLBFS, which consent
will not be unreasonably withheld: (i) Customer shall not be a party to any
merger or consolidation with, or purchase or otherwise acquire all or
substantially all of the assets of, or any material stock, partnership, joint
venture or other equity interest in, any person or entity, or sell, transfer or
lease all or any substantial part of its assets, if any such action would result
in either: (A) a material change in the principal business, ownership or control
of Customer, or (B) a material adverse change in the financial condition or
operations of Customer; (i) Customer shall preserve its existence and good
standing in the jurisdiction(s) of establishment and operation; (iii) Customer
shall not engage in any material business substantially different from its
business in effect as of the date of application by Customer for credit from
MLBFS, or cease operating any such material business; (iv) Customer shall not
cause or permit any other person or entity to assume or succeed to any material
business or operations of Customer; and (v) Customer shall not cause or permit
any material change in its controlling ownership.
3.4 COLLATERAL
(a) Pledge of Collateral. To secure payment and performance of the Obligations,
Customer hereby pledges, assigns, transfers and sets over to MLBFS, and grants
to MLBFS first liens and security interests in and upon all of the Collateral,
subject only to Permitted Liens.
(b) Liens. Except upon the prior written consent of MLBFS, Customer shall not
create or permit to exist any lien, encumbrance or security interest upon or
with respect to any Collateral now owned or hereafter acquired other than
Permitted Liens.
(c) Performance of Obligations. Customer shall perform all of its obligations
owing on account of or with respect to the Collateral; it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise, shall be deemed an assumption by MLBFS of any of Customer's said
obligations.
(d) Sales and Collections. So long as no Event of Default shall have occurred
and be continuing, Customer may in the ordinary course of its business (i) sell
any Inventory normally held by Customer for sale, (ii) use or consume any
materials and supplies normally held by Customer for use or consumption and
(iii) collect all of its Accounts. Customer shall take such action with respect
to protection of its Inventory and the other Collateral and the collection of
its Accounts as MLBFS may from time to time reasonably request.
(e) Account Schedules. Upon the request of MLBFS, made now or at any reasonable
time or times hereafter, Customer shall deliver to MLBFS in addition to the
other information required hereunder, a schedule identifying, for each Account
and all Chattel Paper subject to MLBFS' security interest hereunder, each
Account Debtor by name and address and amount, invoice or contract number and
date of each invoice or contract. Customer shall furnish to MLBFS such
additional information with respect to the Collateral, and amounts received by
Customer as proceeds of any of the Collateral, as MLBFS may from time to time
reasonably request.
(f) Alterations and Maintenance. Except upon the prior written consent of MLBFS,
Customer shall not make or permit any material alterations to any tangible
Collateral which might materially reduce or impair its market value or utility.
Customer shall at all times keep the tangible Collateral in good condition and
repair, reasonable wear and tear excepted, and shall pay or cause to be paid all
obligations arising from the repair and maintenance of such Collateral, as well
as all obligations with respect to any Location of Tangible Collateral, except
for any such obligations being contested by Customer in good faith by
appropriate proceedings.
(g) Location. Except for movements required in the ordinary course of Customer's
business. Customer shall give MLBFS 30 days' prior written notice of the placing
at or movement of any tangible Collateral to any location other than a Location
of Tangible Collateral. In no event shall Customer cause or permit any material
tangible Collateral to be removed from the United States without the express
prior written consent of MLBFS.
(h) Insurance. Customer shall insure all of the tangible Collateral under a
policy or policies of physical damage insurance providing that losses will be
payable to MLBFS as its interests may appear pursuant to a Lender's Loss Payable
Endorsement and containing such other provisions as may be
reasonably required by MLBFS. Customer shall further provide and maintain a
policy or policies of comprehensive public liability insurance naming MLBFS as
an additional party insured. Customer shall maintain such other insurance as may
be required by law or is customarily maintained by companies in a similar
business or otherwise reasonably required by MLBFS. All such insurance policies
shall provide that MLBFS will receive not less than 10 days prior written notice
of any cancellation, and shall otherwise be in form and amount and with an
insurer or insurers reasonably acceptable to MLBFS. Customer shall furnish MLBFS
with a copy or certificate of each such policy or policies and, prior to any
expiration or cancellation each renewal or replacement thereof.
(i) Event of Loss. Customer shall at its expense promptly repair all repairable
damage to any tangible Collateral. In the event that any tangible Collateral is
damaged beyond repair, lost, totally destroyed or confiscated (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of $25,000.00
or more, then, on or before the first to occur of (i) 90 days after the
occurrence of such Event of Loss, or (ii) 10 Business Days after the date on
which either Customer or MLBFS shall receive any proceeds of insurance on
account of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer or MLBFS that it disclaims liability in
respect of such Event of Loss, Customer shall, at Customer's option, either
replace the Collateral subject to such Event of Loss with comparable Collateral
free of all liens other than Permitted Liens (in which event Customer shall be
entitled to utilize the proceeds of insurance on account of such Event of Loss
for such purpose, and may retain any excess proceeds of such insurance), or
prepay the Loan by an amount equal to the actual cash value of such Collateral
as determined by either the insurance company's payment (plus any applicable
deductible) or, in absence of insurance company payment, as reasonably
determined by MLBFS. Notwithstanding the foregoing, if at the time of occurrence
of such Event of Loss or any time thereafter prior to replacement or prepayment,
as aforesaid, an Event of Default shall have occurred and be continuing
hereunder, then MLBFS may at its sole option, exercisable at any time while such
Event of Default shall be continuing, require Customer to either replace such
Collateral or make a prepayment on account of the Loan, as aforesaid. Any
partial prepayment of the Loans shall be applied to installments due in inverse
order of maturity.
(j) Notice of Certain Events. Customer shall give MLBFS immediate notice of any
attachment, lien, judicial process, encumbrance or claim affecting or invoking
$25,000.00 or more of the Collateral.
(k) Indemnification. Customer shall indemnify, defend and save MLBFS harmless
from and against any and all claims, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising out
of or in any manner occasioned by (i) the ownership, collection, possession, use
or operation of any Collateral, or (ii) any failure by Customer to perform any
of its obligations hereunder; excluding, however, from said indemnity any such
claims, liabilities, etc. arising directly out of the willful wrongful act or
active gross negligence of MLBFS. This indemnity shall survive the expiration or
termination of this Loan Agreement as to all matters arising or accruing prior
to such expiration or termination.
3.5 EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an "Event of
Default" under this Loan Agreement:
(a) Failure to Pay. Customer shall fail to pay when due any amount owing by
Customer to MLBFS under the Note or this Loan Agreement, or shall fail to pay
when due any other Obligations, and any such failure shall continue for more
than five (5) Business Days after written notice thereof shall have been given
by MLBFS to Customer.
(b) Failure to Perform. Customer or any Guarantor shall default in the
performance or observance of any covenant or agreement on its part to be
performed or observed under this Loan Agreement, the Note or any of the other
Additional Agreements (not constituting an Event of Default under any other
clause of this Section), and such default shall continue unremedied for ten (10)
Business Days after written notice thereof shall have been given by MLBFS to
Customer.
(c) Breach of Warranty. Any representation or warranty made by Customer or any
Guarantor contained in this Loan Agreement, the Note or any of the other
Additional Agreements shall at any time prove to have been incorrect in any
material respect when made.
(d) Default Under Other Agreement A default or Event of Default by Customer or
any Guarantor shall occur under the terms of any other agreement, instrument or
document with or intended for the benefit of MLBFS Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated ("MLPF&S") or any of their affiliates, and any required
notice shall have been given and required passage of time shall have elapsed.
(e) Bankruptcy Event. Any Bankruptcy Event shall occur.
(f) Material Impairment Any event shall occur which shall reasonably cause MLBFS
to in good faith believe that the prospect of full payment or performance by
Customer or any Guarantor of any of their respective liabilities or obligations
under this Loan Agreement, the Note or any of the other Additional Agreements to
which Customer or such Guarantor is a party has been materially impaired. The
existence of such a material impairment shall be determined in a manner
consistent with the intent of Section 1-208 of the UCC.
(g) Acceleration of Debt to Other Creditors. Any event shall occur which results
in the acceleration of the maturity of any indebtedness of $100,000.00 or more
of Customer or any Guarantor to another creditor under any indenture, agreement,
undertaking, or otherwise.
(h) Seizure or Abuse of Collateral. The Collateral, or any material part
thereof, shall be or become subject to any material abuse or misuse, or any
levy, attachment, seizure or confiscation which is not released within ten (10)
Business Days.
3.6 REMEDIES
(a) Remedies Upon Default. Upon the occurrence and during the continuance of any
Event of Default, MLBFS may at its sole option do any one or more or all of the
following, at such time and in such order as MLBFS may in its sole discretion
choose:
(i) Termination. MLBFS may without notice terminate its obligation to make the
Loan (if the loan has not then been funded) or otherwise extend any credit to or
for the benefit of Customer (it being understood, however, that upon the
occurrence of any Bankruptcy Event all such obligations shall automatically
terminate without any action on the part of MLBFS); and upon any such
termination MLBFS shall be relieved of all such obligations.
(ii) Acceleration. MLBFS may declare the principal of and interest and any
premium on the Note, and all other Obligations to be forthwith due and payable,
whereupon all such amounts shall be immediately due and payable, without
presentment, demand for payment, protest and notice of protest, notice of
dishonor, notice of acceleration, notice of intent to accelerate or other notice
or formality of any kind, all of which are hereby expressly waived; provided,
however, that upon the occurrence of any Bankruptcy Event all such principal,
interest, premium and other Obligations shall automatically become due and
payable without any action on the part of MLBFS.
(iii) Exercise Other Rights. MLBFS may exercise any or all of the remedies of a
secured party under applicable law, including, but not limited to, the UCC, and
any or all of its other rights and remedies under this Loan Agreement and the
Additional Agreements.
(iv) Possession. MLBFS may require Customer to make the Collateral and the
records pertaining to the Collateral available to MLBFS at a place designated by
MLBFS which is reasonably convenient to Customer, or may take possession of the
Collateral and the records pertaining to the Collateral without the use of any
judicial process and without any prior notice to Customer.
(v) Sale. MLBFS may sell any or all of the Collateral at public or private sale
upon such terms and conditions as MLBFS may reasonably deem proper. MLBFS may
purchase any Collateral at any such public sale. The net proceeds of any such
public or private sale and all other amounts actually collected or received by
MLBFS pursuant hereto, after deducting all costs and expenses incurred at any
time in the collection of the Obligations and in the protection, collection and
sale of the Collateral, will be applied to the payment of the Obligations, with
any remaining proceeds paid to Customer or whoever else may be entitled thereto,
and with Customer and each Guarantor remaining jointly and severally liable for
any amount remaining unpaid after such application.
(vi) Delivery of Cash, Checks, Etc. MLBFS may require Customer to forthwith upon
receipt, transmit and deliver to MLBFS in the form received, all cash, checks,
drafts and other instruments for the payment of money (properly endorsed, where
required, so that such items may be collected by MLBFS) which may be received by
Customer at any time in full or partial payment of any Collateral, and require
that Customer not commingle any such items which may be so received by Customer
with any other of its funds or property but instead hold them separate and apart
and in trust for MLBFS until delivery is made to MLBFS.
(vii) Notification of Account Debtors. MLBFS may notify any Account Debtor that
its Account or Chattel Paper has been assigned to MLBFS and direct such Account
Debtor to make payment directly to MLBFS of all amounts due or becoming due with
respect to such Account or Chattel Paper; and MLBFS may enforce payment and
collect, by legal proceedings or otherwise, such Account or Chattel Paper.
(viii) Control of Collateral. MLBFS may otherwise take control in any lawful
manner of any cash or non-cash items of payment or proceeds of Collateral and of
any rejected, returned, stopped in transit or repossessed goods included in the
Collateral and endorse Customer's name on any item of payment on or proceeds of
the Collateral.
(b) Set-Off. MLBFS shall have the further right upon the occurrence and during
the continuance of an Event of Default to set-off, appropriate and apply toward
payment of any of the Obligations, in such order of application as MLBFS may
from time to time and at any time elect, any cash, credit, deposits, accounts,
financial assets, investment property, securities and any other property of
Customer which is in transit to or in the possession, custody or control of
MLBFS, MLPF&S or any agent, bailee, or affiliate of MLBFS or MLPF&S. Customer
hereby collaterally assigns and grants to MLBFS a continuing security interest
in all such property as additional Collateral.
(c) Power of Attorney. Effective upon the occurrence and during the continuance
of an Event of Default, Customer hereby irrevocably appoints MLBFS as its
attorney-in-fact, with full power of substitution, in its place and stead and in
its name or in the name of MLBFS, to from time to time in MLBFS' sole discretion
take any action and to execute any instrument which MLBFS may deem necessary or
advisable to accomplish the purposes of this Loan Agreement, including, but not
limited to, to receive, endorse and collect all checks, drafts and other
instruments for the payment of money made payable to Customer included in the
Collateral.
(d) Remedies are Severable and Cumulative. All rights and remedies of MLBFS
herein are severable and cumulative and in addition to all other rights and
remedies available in the Note, the other Additional Agreements, at law or in
equity, and any one or more of such rights and remedies may be exercised
simultaneously or successively.
(e) Notices. To the fullest extent permitted by applicable law, Customer hereby
irrevocably waves and releases MLBFS of and from any and all liabilities and
penalties for failure of MLBFS to comply with any statutory or other requirement
imposed upon MLBFS relating to notices of sale, holding of sale or reporting of
any sale, and Customer waives all rights of redemption or reinstatement from any
such sale. Any notices required under applicable law shall be reasonably and
properly given to Customer if given by any of the methods provided herein at
least 5 Business Days prior to taking action. MLBFS shall have the right to
postpone or adjourn any sale or other disposition of Collateral at any time
without giving notice of any such postponed or adjourned date. In the event
MLBFS seeks to take possession of any or all of the Collateral by court process,
Customer further irrevocably waives to the fullest extent permitted by law any
bonds and any surety or security relating thereto required by any statute, court
rule or otherwise as an incident to such possession, and any demand for
possession prior to the commencement of any suit or action.
3.7 MISCELLANEOUS
(a) Non-Waiver. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to this Loan Agreement, the Note or any of the
other Additional Agreements shall operate as a waiver thereof, at no single or
partial exercise of any such right, power or remedy shall preclude any other or
further exercise thereof, or the exercise of any other right, power or remedy.
Neither any waiver of any provision of this Loan Agreement, the Note or any of
the other Additional Agreements, nor any consent to any departure by Customer
therefrom, shall be effective unless the same shall be in writing and signed by
MLBFS. Any waiver of any provision of this Loan Agreement, the Note or any of
the other Additional Agreements and any consent to any departure by Customer
from the terms of this Loan Agreement, the Note or any of the other Additional
Agreements shall be effective only in the specific instance and for the specific
purpose for which given. Except as otherwise expressly provided herein, no
notice to or demand on Customer shall in any case entitle Customer to any other
or further notice or demand in similar or other circumstances.
(b) Disclosure. Customer hereby irrevocably authorizes MLBFS and each of its
affiliates, including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred) obtain from and disclose to each other
any and all financial and other information about Customer.
(c) Communications. All notices and other communications required or permitted
hereunder shall be in writing, and shall be either delivered personally, mailed
by postage prepaid certified mail or sent by express overnight courier or by
facsimile. Such notices and communications shall be deemed to be given on the
date of personal delivery, facsimile transmission or actual delivery of
certified mail, or one Business Day after delivery to an express overnight
courier. Unless otherwise specified in a notice sent or delivered in accordance
with the terms hereof, notices and other communications in writing shall be
given to the parties hereto at their respective addresses set forth at the
beginning of this Loan Agreement, or, in the case of facsimile transmission, to
the parties at their respective regular facsimile telephone number.
(d) Costs, Expenses and Taxes. Customer shall upon demand pay or reimburse MLBFS
for (i) all Uniform Commercial Code and other filing and search fees and
expenses incurred by MLBFS in connection with the verification, perfection or
preservation of MLBFS' rights hereunder or in the Collateral or any other
collateral for the Obligations; (ii) any and all stamp, transfer and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery and/or recording of this Loan Agreement or any of the Additional
Agreements; and (iii) all reasonable fees and out-of-pocket expenses (including,
but not limited to, reasonable fees and expenses of outside counsel) incurred by
MLBFS in connection with the collection of any sum payable hereunder or under
any of the Additional Agreements not paid when due, the enforcement of this Loan
Agreement or any of the Additional Agreements and the protection of MLBFS'
rights hereunder or thereunder, excluding, however, salaries and normal overhead
attributable to MLBFS' employees. The obligations of Customer under this
paragraph shall survive the expiration or termination of this Loan Agreement and
the discharge of the other Obligations.
(e) Right to Perform Obligations. If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty on the part of Customer contained in this Loan Agreement shall be
breached, MLBFS may, in its sole discretion, after 5 Business Days written
notice is sent to Customer (or such lesser notice, including no notice, as is
reasonable under the circumstances), do the same or cause it to be done or
remedy any such breach, and may expend its funds for such purpose. Any and all
reasonable amounts so expended by MLBFS shall be repayable to MLBFS by Customer
upon demand, with interest at the "Interest Rate" (as that item is defined in
the Note) during the period from and including the date funds are so expended by
MLBFS to the date of repayment, and all such amounts shall be additional
Obligations. The payment or performance by MLBFS of any of Customer's
obligations hereunder shall not relieve Customer of said obligations or of the
consequences of having failed to pay or perform the same, and shall not waive or
be deemed a cure of any Default.
(f) Late Charge. Any payment required to be made by Customer pursuant to this
Loan Agreement or any of the Additional Agreements not paid within ten (10) days
of the applicable due date shall be subject to a late charge in an amount equal
to the lesser of: (i) 5% of the overdue amount, or (ii) the maximum amount
permitted by applicable law. Such late charge shall be payable on demand.
(g) Further Assurances. Customer agrees to do such further acts and things and
to execute and deliver to MLBFS such additional agreements, instruments and
documents as MLBFS may reasonably require or deem advisable to effectuate the
purposes of this Loan Agreement, the Note or any of the other Additional
Agreements, or to establish, perfect and maintain MLBFS' security interests and
liens upon the Collateral, including, but not limited to: (i) executing
financing statements or amendments thereto when and as reasonably requested by
MLBFS; and (ii) if in the reasonable judgment of MLBFS it is required by local
law, causing the owners and/or mortgagees of the real property on which any
Collateral may be located to execute and deliver to MLBFS waivers or
subordinations reasonably satisfactory to MLBFS with respect to any rights in
such Collateral.
(h) Binding Effect. This Loan Agreement, the Note and the other Additional
Agreements shall be binding upon, and shall inure to the benefit of MLBFS,
Customer and their respective successors and assigns. Customer shall not assign
any of its rights or delegate any of its obligations under this Loan Agreement,
the Note or any of the other Additional Agreements without the prior written
consent of MLBFS, Unless otherwise expressly agreed to in a writing signed by
MLBFS, no such consent shall in any event relieve Customer of any of its
obligations under this Loan Agreement, the Note or any of the other Additional
Agreements.
(i) Headings. Captions and section and paragraph headings in this Loan Agreement
are inserted only as a matter of convenience, and shall not affect the
interpretation hereof
(j) Governing Law. This Loan Agreement, the Note and, unless otherwise expressly
provided therein, each of the other Additional Agreements, shall be governed in
all respects by the laws of the State of Illinois.
(k) Severabllity of Provisions. Whenever possible, each provision of this Loan
Agreement, the Note and the other Additional Agreements shall be interpreted in
such manner as to be effective and valid under applicable law. Any provision of
this Loan Agreement, the Note or any of the other Additional Agreements which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of this Loan Agreement, the Note
and the other Additional Agreements or affecting the validity or enforceability
of such provision in any other jurisdiction.
(l) Term. This Loan Agreement shall become effective when accepted by MLBFS at
its office in Chicago Illinois, and subject to the terms hereof, shall continue
in effect so long thereafter as there shall be any moneys owing hereunder or
under the Note, or there shall be any other Obligations outstanding.
(m) Counterparts. This Loan Agreement may be executed in one or more
counterparts which, when taken together, constitute one and the same agreement.
(n) Jurisdiction; Waiver. CUSTOMER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN
ITS SOLE DISCRETION, TO ENFORCE THIS LOAN AGREEMENT, THE TERM NOTE AND THE OTHER
ADDITIONAL AGREEMENTS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER
JURISDICTION WHERE CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE
LOCATED. CUSTOMER IRREVOCABLY SUBMITS ITSELF TO JURISDICTION IN THE STATE OF
ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT IN THE COUNTY OF XXXX FOR SUCH
PURPOSES, AND CUSTOMER WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION
AND VENUE AND THE CONVENIENCE OF ANY SUCH FORUM, AND ANY AND ALL RIGHTS TO
REMOVE SUCH ACTION FROM STATE TO FEDERAL COURT. CUSTOMER FURTHER WAIVES ANY
RIGHTS TO COMMENCE ANY ACTION AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE
COUNTY OF XXXX AND STATE OF ILLINOIS. MLBFS AND CUSTOMER HEREBY EACH EXPRESSLY
WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER PARTY WITH
RESPECT TO ANY MATTER RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THE TERM LOAN, THIS LOAN AGREEMENT, ANY ADDITIONAL AGREEMENTS AND/OR ANY OF THE
TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT. CUSTOMER
FURTHER WAIVES THE RIGHT TO BRING ANY NON-COMPULSORY COUNTERCLAIMS.
(o) Integration. THIS LOAN AGREEMENT, TOGETHER WITH THE NOTE AND THE OTHER
ADDITIONAL AGREEMENTS, CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE
FULL AND FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN AGREEMENTS OR
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. WITHOUT LIMITING THE FOREGOING,
CUSTOMER ACKNOWLEDGES THAT: (I) NO PROMISE OR COMMITMENT HAS BEEN MADE TO fT BY
MLBFS, MLPF&S OR ANY OF THEIR RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES TO
MAKE THE LOAN ON ANY TERMS OTHER THAN AS EXPRESSLY SET FORTH HEREIN AND IN THE
NOTE, OR TO MAKE ANY OTHER LOAN OR OTHERWISE EXTEND ANY OTHER CREDIT TO CUSTOMER
OR ANY OTHER PARTY; AND (II) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS
LOAN AGREEMENT SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS, LETTERS OF INTENT
AND APPROVAL AND COMMITMENT LETTERS FROM MLBFS TO CUSTOMER, NONE OF WHICH SHALL
BE CONSIDERED AN ADDITIONAL AGREEMENT. NO AMENDMENT OR MODIFICATION OF THIS
AGREEMENT OR ANY OF THE ADDITIONAL AGREEMENTS TO WHICH CUSTOMER IS A PARTY SHALL
BE EFFECTIVE UNLESS IN A WRITING SIGNED BY BOTH MLBFS AND CUSTOMER.
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.
X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY
By: /s/ Xxxx Xxxxx /s/ Xxxx Xxxxx
------------------------------ -----------------------------
Signature(1) Signature(2)
Xxxx Xxxxx Xxxx Xxxxx
------------------------------ -----------------------------
Printed Name Printed Name
Vice President President
------------------------------ -----------------------------
Title Title
Accepted at Chicago, Illinois:
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
By: /s/ illegible
------------------------------------------
EXHIBIT A
ATTACHED TO AND HEREBY MADE A PART OF TERM LOAN AMD SECURITY AGREEMENT NO.
0003552001 BETWEEN XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC. AND X.X. XXXXX
& COMPANY, INC. D/B/A DATA CONVERSION LABORATORY
Additional Locations of Tangible Collateral:
[LOGO] NO. 0003552001
--------------------------------------------------------------------------------
$150,000.00 March 29. 2000
COLLATERAL INSTALLMENT NOTE
FOR VALUE RECEIVED, X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY,
a corporation organized and existing under the laws of the State of New York
('Customer") hereby promises to pay to the order of XXXXXXX XXXXX BUSINESS
FINANCIAL SERVICES INC., a corporation organized and existing unoer the laws of
the State of Delaware ('MLBFS'), in lawful money of the United States, the
principal sum of One Hundred Fifty Thousand And 00/100 Dollars ($150,000.00), or
if more or less, the aggregate amount advanced by MLBFS to Customer pursuant to
the Loan Agreement (the "Loan Amount1); together with interest on the unpaid
balance of the Loan Amount, from the Closing Date until payment, at the Interest
Rate as follows:
1. DEFINITIONS.
(a) In addition to terms defined elsewhere in this Note, as used herein, the
following terms shall have the following meanings:
(i) "Closing Date" shall mean the date of advancement of funds hereunder.
(ii) "Excess Interest" shall mean any amount of interest in excess of the
maximum amount of interest permitted to be charged by law.
(iii) "Interest Rate" shall mean a variable per annum rate equal to the sum of
(i) 1.00% per annum, and (ii) the rate from time to time published in the "Money
Rates" section of The Wall Street Journal as being the "Prime Rate" (or, if more
than one rate is published as the Prime Rate, then the highest of such rates).
The Interest Rate will change as of the date of publication in The Wall Street
Journal of a Prime Rate that is different from that published on the preceding
Business Day. In the event that The Wall Street Journal shall, for any reason,
fail or cease to publish the Prime Rate, MLBFS will choose a reasonably
comparable index or source to use as the basis for the Interest Rate.
(iv) "Loan Agreement" shall mean that certain TERM LOAN AND SECURITY AGREEMENT
NO. 0003552001 between Customer and MLBFS, as the same may have been or may
hereafter be amended or supplemented.
(v) "Note" shall mean this COLLATERAL INSTALLMENT NOTE.
(b) Capitalized terms used herein and not defined herein shall have the meaning
set forth in the Loan Agreement. Without limiting the foregoing, the terms
"Additional Agreements", "Bankruptcy Event" and "Event of Default" shall have
the respective meanings set forth in the Loan Agreement.
2. PAYMENT AND OTHER TERMS. Customer shall pay the indebtedness under this Note
in 48 consecutive monthly installments commencing on the first day of the second
calendar month following the Closing Date and continuing on the first day of
each calendar month thereafter until this Note shall be paid in full. Each such
installment in an amount equal to the sum of (i) accrued interest, and (ii)
1/48th of the Loan Amount (with the first such installment including interest
accrued from the date of funding).
Each payment received hereunder shall be applied first to any fees and expenses
of MLBFS payable by Customer under the terms of the Loan Agreement (including,
without limitation, late charges), next to accrued interest at the Interest
Rate, with the balance applied on account of the unpaid principal hereof. Any
part of the principal hereof or interest hereon or other sums payable hereunder
or under the Loan Agreement not paid within ten (10) days of the applicable due
date shall be subject to rate charge equal to the lesser of (i) 5% of the
overdue amount, or (ii) the maximum amount permitted by law. All interest shall
be computed on the basis of actual days elapsed over a 360-day year. All sums
payable hereunder shall be payable at 0000 Xxxxxxxxxxx Xxxxxx Xxxxx. Xxxxxxx.
Xxxxxxxx 00000, or at such other place or places as the holder hereof may from
time to time appoint in writing.
Customer may prepay this Note at any time in whole or in part: provided,
however, that any prepayment prior to the end of the first "year" after the
Closing Date shall be accompanied by a premium equal to 3% of the amount
prepaid; any prepayment during the second year following the Closing Date shall
be accompanied by a premium equal to 2% of the amount prepaid; and any
prepayment thereafter shall be accompanied by a premium equal to 1% of the
amount prepaid. A "year" for the purposes of this clause is a 365-366 day period
commencing on the Closing Date or any anniversary of the Closing Date Upon any
acceleration of this Note, as hereinafter provided, there shall become due from
Customer the same prepayment premium that would have been payable if Customer
had then voluntarily prepaid the then outstanding balance of this Note in full.
Any partial prepayment shall be applied to installments of the Loan Amount in
inverse order of maturity.
This Note is the Collateral Installment Note referred to in, and is entitled to
all of the benefits of the Loan Agreement and any Additional Agreements. If
Customer shall fail to pay when due any installment or other sum due hereunder,
and any such failure shall continue for more than five (5) Business Days after
written notice thereof shall have been given by the holder hereof to Customer,
or if any other Event of Default shall have occurred and be continuing, then at
the option of the holder hereof (or upon the occurrence of any Bankruptcy Event,
automatically, without any action on the part of the holder hereof), and in
addition to all other rights and remedies available to such holder under the
Loan Agreement, any Additional Agreements, and otherwise, the entire Loan Amount
at such time remaining unpaid, together with accrued interest thereon, any
prepayment premium due upon acceleration and all other sums then owing by
Customer under the Loan Agreement, may be declared to be and thereby become
immediately due and payable.
It is expressly understood, however, that nothing contained in the Loan
Agreement, any other agreement, instrument or document executed by Customer, or
otherwise, shall affect or impair the right, which is unconditional and
absolute, of the holder hereof to enforce payment of all sums due under this
Note at or after maturity, whether by acceleration or otherwise, or shall affect
the obligation of Customer, which is also unconditional and absolute, to pay the
sums payable under this Note in accordance with its terms. Except as otherwise
expressly set forth herein or in the Loan Agreement, Customer hereby waives
presentment demand for payment, protest and notice of protest notice of
dishonor, notice of acceleration, notice of intent to accelerate and all other
notices and formalities in connection with this Note.
Wherever possible each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Note Notwithstanding any provision to the contrary in this Note, the Loan
Agreement or any of the Additional Agreements, no provision of this Note, the
Loan Agreement or any of the Additional Agreements shall require the payment or
permit the collection of any Excess Interest. If any Excess Interest is provided
for, or is adjudicated as being provided for, in this Note, the Loan Agreement
or any of the Additional Agreements, then: (a) Customer shall not be obligated
to pay any Excess Interest; and (b) any Excess Interest that MLBFS may have
received under this Note, the Loan Agreement or any of the Additional Agreements
shall, at the option of MLBFS, be: (i) applied as a credit against the then
unpaid principal balance of this Note, or accrued interest hereon not to exceed
the maximum amount permitted by law, or both, (ii) refunded to the payor
thereof, or (iii) any combination of the foregoing.
This Note shall be construed in accordance with the laws of the State of
Illinois and may be enforced by the holder hereof in any jurisdiction in which
the Loan Agreement may be enforced.
IN WITNESS WHEREOF, this Note has been executed by Customer as of the day
and year first above written.
X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY
By: /s/ Xxxx Xxxxx /s/ Xxxx Xxxxx
------------------------------ -----------------------------
Signature(1) Signature(2)
Xxxx Xxxxx Xxxx Xxxxx
------------------------------ -----------------------------
Printed Name Printed Name
Vice President President
------------------------------ -----------------------------
Title Title
[LOGO] SECRETARY'S CERTIFICATE
--------------------------------------------------------------------------------
The undersigned hereby certifies to XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES
INC. that the undersigned is the duly appointed and acting Secretary (or
Assistant Secretary) of MJ. GROSS & COMPANY, INC. D/B/A DATA CONVERSION
LABORATORY, a corporation duly organized, validly existing and in good standing
under the laws of the State of New York, and that the following is a true,
accurate and compared transcript of resolutions duly validly and lawfully
adopted on the 30 day of March, 2000 by the Board of Directors of said
Corporation acting in accordance with the laws of the state of incorporation and
the charter and by-laws of said Corporation:
"RESOLVED, that this Corporation is authorized and empowered, now and from time
to time hereafter, to borrow and/or obtain credit from, and/or enter into other
finance arrangements with, XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
("MLBFS'), and in connection therewith to grant to MLBFS liens and security
interests on any or all property belonging to this Corporation; al such
transactions to be on such terms and conditions as may be mutually agreed from
time to time between this Corporation and MLBFS; and
"FURTHER RESOLVED, that the President any Vice President, Treasurer, Secretary
or other officer of this Corporation, or any one or more of them, be and each of
them hereby is authorized and empowered to: (a) execute and deliver to MLBFS on
behalf of this Corporation any and all loan agreements, promissory notes,
security agreements pledge agreements, financing statements, mortgages, deeds of
trust, leases and/or all other agreements, instruments and documents required by
MLBFS in connection therewith, and any present or future extensions, amendments,
supplements, modifications and restatements (hereof; al in such form as any such
officer shall approve, as conclusively evidenced by his or her signature
thereon, and (b) do and perform all such ads and things deemed by any such
officer to be necessary or advisable to carry out and perform the undertakings
and agreements of this Corporation in connection therewith; and any and al prior
acts of each of said officers in these premises are hereby ratified and
confirmed in all respects; and
"FURTHER RESOLVED, that MLBFS is authorized to rely upon the foregoing
resolutions until it receives written notice of any change or revocation from an
authorized officer of (his Corporation, which change or revocation shall not in
any event affect the obligations of this Corporation with respect to any
transaction conditionally agreed or committed to by MLBFS or having its
inception prior to the receipt of such notice by MLBFS."
The undersigned further certifies that: (a) the foregoing resolutions have not
been rescinded, modified or repealed in any manner, are not in conflict with
any agreement of said Corporation and are in full force and effect as of the
date of this Certificate, and (b) the following individuals are now the duly
elected and acting officers of said Corporation and the signatures set forth
below are the true signatures of said officers.
President: /s/ Xxxx Xxxxx
----------------------------------
Vice President: /s/ Xxxx Xxxxx
----------------------------------
Treasurer: /s/ Xxxx Xxxxx
----------------------------------
Secretary: /s/ Xxxx Xxxxx
----------------------------------
-------------------------------------------------
Additional Title
IN WITNESS WHEREOF, the undersigned has executed this Certificate and has
affixed the seal of said Corporation hereto, pursuant to due authorization
all as of this 30th day of March, 2000.
---- -----------
(Corporate Seal) /s/ Xxxx Xxxxx
---------------------------------
Secretary
Printed Name: Xxxx Xxxxx
---------------------------------
[LOGO] UNCONDITIONAL GUARANTY
-------------------------------------------------------------------------------
FOR VALUE RECEIVED, and in order to induce XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC. ("MLBFS") to advance moneys or extend or continue to extend credit
or lease property to or for the benefit of, or modify its credit relationship
with, or enter into any other financial accommodations with X.X. XXXXX &
COMPANY, INC. D/B/A DATA CONVERSION LABORATORY, a corporation organized and
existing under the laws of me State of New York (with any successor in interest,
including, without limitation, any successor by merger or by operation of law,
herein collectively referred to as "Customer") under: (a) that certain TERM LOAN
AND SECURITY AGREEMENT NO. 0003552001 between MLBFS and Customer (the "Loan
Agreement"), (b) any "Additional Agreements", as that term is defined in the
Loan Agreement, including, without limitation, the NOTE incorporated by
reference in the Loan Agreement, and (c) all present and future amendments,
restatements, supplements and other evidences of any extensions, increases,
renewals, modifications and other changes of or to the Loan Agreement or any
Additional Agreements) (collectively, the "Guaranteed Documents"), the
undersigned (individually. "Guarantor", and collectively "Guarantors") hereby
jointly and severally unconditionally guarantee to MLBFS (subject, however, to
the limitation of liability hereinafter set forth): (i) the prompt and full
payment when due, by acceleration or otherwise, of all sums now or any time
hereafter due from Customer to MLBFS under the Guaranteed Documents, (ii) the
prompt, full and faithful performance and discharge by Customer of each and
every other covenant and warranty of Customer set forth in the Guaranteed
Documents, and (iii) the prompt and full payment and performance of all other
indebtedness, liabilities and obligations of Customer to MLBFS, howsoever
created or evidenced, and whether now existing or hereafter arising
(collectively, the "Obligations"). Guarantors further agree to pay all
reasonable costs and expenses (including, but not limited to, court costs and
reasonable attorneys' fees) paid or incurred by MLBFS in endeavoring to collect
or enforce performance of any of the Obligations, or in enforcing this Guaranty.
Guarantors acknowledge that MLBFS is relying on the execution and delivery of
this Guaranty in advancing moneys to or extending or continuing to extend credit
to or for the benefit of Customer.
This Guaranty is absolute, unconditional and continuing and shall remain in
effect until all of the Obligations shall have been fully and indefeasibly paid,
performed and discharged. Upon the occurrence and during the continuance of any
default or Event of Default under any of the Guaranteed Documents, any or all of
the indebtedness hereby guaranteed then existing shall, at the option of MLBFS,
become immediately due and payable from Guarantors (it being understood,
however, that upon the occurrence of any "Bankruptcy Event", as defined in the
Loan Agreement, all such indebtedness shall automatically become due and payable
without action on the part of MLBFS). Notwithstanding the occurrence of any such
event, this Guaranty shall continue and remain in full force and effect. To the
extent MLBFS receives payment with respect to the Obligations, and all or any
part of such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside, required to be repaid by MLBFS or is repaid by MLBFS
pursuant to a settlement agreement, to a trustee, receiver or any other person
or entity, whether under any Bankruptcy law or otherwise (a "Returned Payment"),
this Guaranty shall continue to be effective or shall be reinstated, as the case
may be, to the extent of such payment or repayment by MLBFS, and the
indebtedness or part thereof intended to be satisfied by such Returned Payment
shall be revived and continued in full force and effect as if said Returned
Payment had not been made.
The liability of Guarantors hereunder shall in no event be affected or impaired
by any of the following, any of which may be done or omitted by MLBFS from time
to time, without notice to or the consent of any Guarantor: (a) any renewals,
amendments, modifications or supplements of or to any of the Guaranteed
Documents, or any extensions, forbearances, compromises or releases of any of
the Obligations or any of MLBFS' rights under any of the Guaranteed Documents;
(b) any acceptance by MLBFS of any collateral or security for. or other
guarantees of, any of the Obligations; (c) any failure, neglect or omission on
the part of MLBFS to realize upon or protect any of the Obligations, or any
collateral or security therefor, or to exercise any lien upon or right of
appropriation of any moneys, credits or property of Customer or any other
guarantor, possessed by or under the control of MLBFS or any of its affiliates,
toward the liquidation or reduction of the Obligations; (d) any invalidity
irregularity or unenforceability of all or any part of the Obligations, of any
collateral security for she Obligations, or the Guaranteed Documents; (e) any
application of payments or credits by MLBFS; (f) the granting of credit from
time to time by WLBFS to Customer in excess of the amount set forth in the
Guaranteed Documents; or (g) any other act of commission or omission of any kind
or at any time upon the part of MLBFS or any of its affiliates or any of their
respective employees or agents with respect to any matter whatsoever MLBFS shall
not be required at any time, as a condition of Guarantors' obligations hereunder
to resort to payment from Customer or other persons or entities whatsoever, or
any of their properties or estates or resort to any collateral or pursue y
exhaust any other rights or remedies whatsoever.
No release or discharge in whole or in part of any one or more of the Guarantors
or any other guarantor of the Obligations shall release or discharge any of the
other Guarantors or any other guarantor, unless and until all of the Obligations
shall have been indefeasibly fully paid and discharged. Guarantors expressly
waive presentment, protest, demand, notice of dishonor or default, notice of
acceptance of this Guaranty, notice of advancement of funds under the Guaranteed
Documents and all other notices and formalities to which Customer or Guarantors
might be entitled, by statute or otherwise, and, so long as there are any
Obligations or MLBFS is committed to extend credit to Customer, Guarantors waive
any right to revoke or terminate this Guaranty without the express written
consent of MLBFS.
So long as there are any Obligations, Guarantors shall not have any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right, or remedy of MLBFS
against Customer or any security which MLBFS now has or hereafter acquires,
whether or not such claim, right or remedy arises in equity, under contract, by
statute, under common law, or otherwise.
MLBFS is hereby irrevocably authorized by Guarantors at any time during the
continuance of an Event of Default under the Loan Agreement or any other of the
Guaranteed Documents or in respect of any of the Obligations, in its sole
discretion and without demand or notice of any kind, to appropriate, hold, set
off and apply toward the payment of any amount due hereunder, in such order of
application as MLBFS may elect, all cash, credits, deposits, accounts, financial
assets, investment property, securities and any other property of any Guarantor
which is in transit to or in the possession, custody or control of MLBFS or
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("MLPF&S"), or any of their
respective agents, bailees or affiliates. Guarantors hereby collaterally assign
and grant to MLBFS a continuing security interest in all such property as
additional security for the Obligations. Upon the occurrence and during the
continuance of an Event of Default, MLBFS shall have all rights in such property
available to collateral assignees and secured parties under all applicable laws,
including, without limitation, the Uniform Commercial Code.
Each Guarantor agrees to furnish to MLBFS such financial information concerning
Guarantor as may be required by any of the Guaranteed Documents or as MLBFS may
otherwise from time to time reasonably request. Guarantors further hereby
irrevocably authorize MLBFS and each of its affiliates, including without
limitation MLPF&S, to at any time (whether or not an Event of Default shall have
occurred) obtain from and disclose to each other any and all financial and other
information about any Guarantors.
Each Guarantor severally warrants and agrees that: (a) unless clearly stated or
noted, no material assets shown on any financial statements of such Guarantor
heretofore or hereafter furnished to MLBFS are or will be held in an irrevocable
trust, pension trust, retirement trust, XXX or other trust or form of ownership
exempt from execution by creditors of such Guarantor; and, (b) except upon the
prior written consent of MLBFS, which consent will not be unreasonably withheld,
such Guarantor will not hereafter transfer any material assets of such Guarantor
to any trust or third party if the effect thereof will be to cause such assets
to be exempt from execution by creditors of such Guarantor (excluding, however,
normal and reasonable contributions to pension plans, retirement plans, etc.,
and XXX rollovers).
No delay on the part of MLBFS in the exercise of any right or remedy under any
of the Guaranteed Documents, this Guaranty or any other agreement shall operate
as a waiver thereof, and, without limiting the foregoing, no delay in the
enforcement of any security interest, and no single or partial exercise by MLBFS
of any right or remedy shall preclude any other or further exercise thereof or
the exercise of any other right or remedy. This Guaranty may be executed in any
number of counterparts, each of which counterparts, once they are executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Guaranty. This Guaranty
shall be binding upon Guarantors and their respective heirs and personal
representatives, and shall inure to the benefit of MLBFS and its successors and
assigns. All obligations of the Guarantors hereunder are joint and several.
This Guaranty shall be governed by the laws of the State of Illonois. WITHOUT
LIMITING THE RIGHT OF MLBFS TO ENFORCE THIS GUARANTY IN ANY JURISDICTION AND
VENUE PERMITTED BY APPLICABLE LAW: (I) GUARANTORS AGREE THAT THIS GUARANTY MAY
AT THE OPTION OF MLBFS BE ENFORCED BY MLBFS IN EITHER THE STATE OF ILLINOIS OR
IN ANY OTHER JURISDICTION WHERE ANY GUARANTOR, CUSTOMER OR ANY COLLATERAL FOR
THE OBLIGATIONS OF CUSTOMER MAY BE LOCATED, (II) GUARANTORS IRREVOCABLY SUBMIT
TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT
IN THE COUNTY OF XXXX FOR SUCH PURPOSES, AND (III) GUARANTORS WAIVE ANY AND ALL
RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF ANY SUCH
FORUM AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM STATE TO FEDERAL COURT.
GUARANTORS FURTHER WAIVE ANY RIGHTS TO COMMENCE ANY ACTION AGAINST MLBFS IN ANY
JURISDICTION EXCEPT IN THE COUNTY OF XXXX AND STATE OF ILLINOIS. MLBFS AND
GUARANTORS HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST
THE OTHER PARTY WITH RESPECT TO ANY MATTER RELATING TO, ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THIS GUARANTY AND/OR ANY OF THE TRANSACTIONS WHICH ARE THE
SUBJECT MATTER OF THIS GUARANTY. GUARANTORS FURTHER WAIVE THE RIGHT TO BRING ANY
NON-COMPULSORY COUNTERCLAIMS. Wherever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such 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 Guaranty. No modification or
waiver of any of the provisions of this Guaranty shall be effective unless in
writing and signed by Guarantors and an officer of MLBFS.
Dated as of March 29, 2000.
Guarantor. Address:
/s/ Xxxx Xxxxx 00-00 000xx Xxxxxx
------------------------------------ Xxxxx Xxxxxxx, XX 00000
XXXX XXXXX
/s/ Xxxx Xxxxx 67-27 168th Street
------------------------------------ Xxxxx Xxxxxxx, XX 00000
XXXX XXXXX
Witness: /s/ Xxxxxxx Xxxxx
-------------------------------------
Printed Name: XXXXXXX XXXXX
---------------------------------
[LOGO] CLOSING CERTIFICATE
--------------------------------------------------------------------------------
The undersigned, X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY, a
corporation organized and existing under the laws of the State of New York
("Customer"), as a primary inducement to XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC. ("MLBFS") to make a loan to Customer (the "Loan") pursuant to that
certain TERM LOAN AND SECURITY AGREEMENT No. 0003552001 between Customer and
MLBFS dated as of March 29, 2000 (the "Loan Agreement") DOES HEREBY REPRESENT,
WARRANT AND AGREE AS FOLLOWS:
1. All of Customer's representations and warranties in the Loan Agreement are
true and correct and remade as of the date hereof, and, without limiting the
foregoing: (i) subject only to "Permitted Liens" (as defined in the Loan
Agreement), MLBFS has a first lien and security interest upon all of the
"Collateral" under the Loan Agreement (including any Collateral financed or
refinanced with the proceeds of the Loan), and (ii) the Loan is being applied on
account of and will satisfy the "Loan Purpose" under the Loan Agreement.
2. There has not occurred any event which constitutes an "Default" under the
Loan Agreement.
3. There has not occurred any material adverse change in the business or
financial condition of Customer or any Guarantor of Customer's obligations to
MLBFS since the date of the last financial statements submitted to MLBFS.
4. MLBFS is hereby authorized and directed to disburse the proceeds of the Loan
in the amount of $150,000.00 as follows:
Wire transfer into Customer's WCMA No. 862-07N67.
Dated this 30th day of March, 2000
---- -----
X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY
By: /s/ Xxxx Xxxxx /s/ Xxxx Xxxxx
------------------------------ -----------------------------
Signature(1) Signature(2)
Xxxx Xxxxx Xxxx Xxxxx
------------------------------ -----------------------------
Printed Name Printed Name
Vice President President
------------------------------ -----------------------------
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