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RMPOLLAK:DC:54030.5:09/10/97:04:41 pm
FINANCING AND SECURITY AGREEMENT
THIS FINANCING AND SECURITY AGREEMENT (the "Agreement") is
made this 11th day of September, 1997, by and among ARGUSS
HOLDINGS, INC., a Delaware corporation ("Arguss"), WHITE MOUNTAIN
CABLE CONSTRUCTION CORP., a Delaware corporation ("White
Mountain"), CONCEPTRONIC, INC., a Delaware corporation
("Conceptronic", together with Arguss and White Mountain
collectively, the "Borrowers" and each a "Borrower") and
NATIONSBANK, N.A., a national banking association, its successors
and assigns (the "Lender").
RECITALS
A. Arguss and White Mountain (the "White Mountain
Borrowers") have applied to the Lender for various credit
facilities consisting of (i) a term loan in the principal amount
of Four Million and No/100 Dollars ($4,000,000.00) to be used to
refinance existing debt, (ii) a line of credit in the maximum
principal amount of Three Million Five Hundred Thousand and
No/100 Dollars ($3,500,000.00) to be used to finance capital
expenditures and (iii) a revolving line of credit in the maximum
principal amount of Three Million and No/100 Dollars
($3,000,000.00) to be used to for working capital and Arguss and
Conceptronic (the "Conceptronic Borrowers") have applied to the
Lender for a credit facility in the amount of One Million Five
Hundred Thousand and No/100 Dollars ($1,500,000.00) to be used
for working capital.
B. The Lender is willing to make these credit facilities
available to the Borrowers upon the terms and subject to the
conditions hereinafter set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual
agreements herein contained, and other good and valuable consid
eration, the receipt and sufficiency of which are hereby acknowl
edged, the Borrowers and the Lender hereby agree as follows:
I. DEFINITIONS
SECTION I.1 Certain Defined Terms. As used in this
Agreement, the terms defined in the Preamble and Recitals hereto
shall have the respective meanings specified therein, and the
following terms shall have the following meanings:
"Account" individually and "Accounts" collectively mean
all presently existing or hereafter acquired or created accounts,
accounts receivable, contract rights, notes, drafts, instruments,
acceptances, chattel paper, leases and writings evidencing a
monetary obligation or a security interest in or a lease of
goods, all rights to receive the payment of money or other
consideration under present or future contracts (including,
without limitation, all rights to receive payments under present
ly existing or hereafter acquired or created letters of credit),
or by virtue of merchandise sold or leased, services rendered,
loans and advances made or other considerations given, by or set
forth in or arising out of any present or future chattel paper,
note, draft, lease, acceptance, writing, bond, insurance policy,
instrument, document or general intangible, and all extensions
and renewals of any thereof, all rights under or arising out of
present or future contracts, agreements or general interest in
merchandise which gave rise to any or all of the foregoing,
including all goods, all claims or causes of action now existing
or hereafter arising in connection with or under any agreement or
document or by operation of law or otherwise, all collateral
security of any kind (including real property mortgages) given by
any person with respect to any of the foregoing and all proceeds
(cash and non-cash) of the foregoing.
"Account Debtor" means any Person who is obligated on
an Eligible Receivable and "Account Debtors" mean all Persons who
are obligated on the Eligible Receivables.
"Affiliate" means, with respect to any Borrowers, any
Person, directly or indirectly controlling, directly or indir
ectly controlled by, or under direct or indirect common control
with any Borrower.
"Agreement" means this Financing and Security Agreement
and all amendments, modifications and supplements hereto which
may from time to time become effective in accordance with the
provisions of Section 11.10 hereof.
"Assets" means, at any time, all assets that should, in
accordance with GAAP consistently applied, be classified as
assets on a consolidated balance sheet of the Borrowers.
"Banking Day" shall mean any day that is not a Satur
day, Sunday or banking holiday in the State of Maryland.
"Collateral" shall mean all of the Borrowers' Accounts,
chattel paper, Equipment, General Intangibles, Motor Vehicles,
documents, instruments and Inventory, Leases (whether or not
designated with initial capital letters), as those terms are
defined in the Uniform Commercial Code as presently adopted and
in effect in the State and shall also cover, without limitation,
(i) any and all property specifically included in those
respective terms in this Agreement or in the Financing Documents
and (ii) all proceeds (cash and non-cash, including, without
limitation, insurance proceeds) of the foregoing.
"Collection" means each check, draft, cash, money,
instrument, item, and other remittance in payment or on account
of payment of the Accounts or otherwise with respect to any
Collateral, including, without limitation, cash proceeds of any
returned, rejected or repossessed goods, the sale or lease of
which gave rise to an Account, and other proceeds of Collateral;
and "Collections" means the collective reference to all of the
foregoing.
"Commonly Controlled Entity" shall mean an entity,
whether or not incorporated, which is under common control with
the Borrowers within the meaning of Section 414(b) or (c) of the
Internal Revenue Code.
"Default" has the meaning described in Article IX.
"Default Rate" means a rate equal to two percent (2%)
per annum in excess of the highest interest rate payable under
the Facility 1 Note.
"Documents" means all documents and documents of title,
whether now existing or hereafter acquired or created, and all
proceeds (cash and non-cash of the foregoing).
"EBIDTA" shall mean the sum of the Borrowers' net
income, plus interest expense, plus income tax expense, plus
depreciation expense, plus amortization expense.
"Eligible Inventory" means all of the Conceptronic's
finished goods Inventory which are completed, pre-sold and
awaiting installation, valued at the lowest of (a) Conceptronic's
net purchase cost or net manufacturing cost, (b) the lowest bulk
market price, (c) Conceptronic's lowest bulk selling price, minus
an allowance for normal profit margin for bulk sales, (d) any
ceiling prices which may be established by any Law of any Govern
mental Authority or (e) prevailing market value, excluding,
however, any Inventory which consists of (i) any goods located
outside of the United States, (ii) any goods located outside of a
State in which the Lender has properly and unavoidably perfected
its security interests by filing, free and clear of all other
Liens, (iii) any goods not in the actual possession of, or in
transit to, or from, Conceptronic (iv) any goods in the
possession of a bailee, warehouseman, consignee or similar third
party, (v) work-in-process, (vi) any goods the sale or other
disposition of which has rise to an Account, (vii) any goods as
to which the Lender determines in the exercise of its sole and
absolute discretion at any time and in good faith are defective,
unmerchantable, slow moving or obsolete, and (viii) any goods
which the Lender in the good faith exercise of its sole and
absolute discretion has deemed to be ineligible because the
Lender otherwise considers the collateral value thereof to the
Lender to be impaired or its ability to realize such value to be
insecure. In the event of any dispute, under the foregoing
criteria, as to whether goods are, or have ceased to be, Eligible
Inventory, the decision of the Lender in the good faith exercise
of its sole and absolute discretion shall control.
"Eligible Receivable" and "Eligible Receivables" mean,
at any time of determination thereof, each of the Conceptronic
Borrowers' Accounts which conform and continue to conform to the
following criteria to the satisfaction of the Lender (the
"Eligibility Standards"): (a) the Account arose from a bona fide
outright sale or lease of goods by either of the Conceptronic
Borrowers, or from services performed by either of the
Conceptronic Borrowers, and (i) such goods have been delivered to
the appropriate Account Debtors or their respective designees,
the Conceptronic Borrowers have in their possession shipping and
delivery receipts evidencing such shipment and delivery, no
return, rejection or repossession has occurred, and such goods
have been finally accepted by the Account Debtor, or (ii) such
services have been satisfactorily completed and accepted by the
appropriate Account Debtor; (b) the Account is based upon an
enforceable order or contract, written or oral, for goods
delivered or for services performed, and the same were shipped,
held, or performed in accordance with such order or contract; (c)
the title of the Conceptronic Borrowers to the Account and,
except as to the Account Debtor and any creditor which finances
the Account Debtor's purchase of such goods, to any goods is
absolute and is not subject to any prior assignment, claim, Lien,
or security interest, except Permitted Liens and Liens created by
the Account Debtors in connection with their interests in the
goods, and the Conceptronic Borrowers otherwise have the full and
unqualified right and power to assign and grant a security
interest in it to the Lender as security and collateral for the
payment of the Obligations; (d) the amount shown on the books of
the Conceptronic Borrowers and on any invoice, certificate,
schedule or statement delivered to the Lender is owing to the
Conceptronic Borrowers and no partial payment has been received
unless reflected with that delivery; (e) the Account is not
subject to any claim of reduction, counterclaim, set off,
recoupment, or other defense in law or equity, or any claim for
credits, allowances, or adjustments by the Account Debtor because
of returned, inferior, or damaged goods or unsatisfactory
services, or for any other reason; (f) the Account Debtor has not
returned or refused to retain, or otherwise notified the
Conceptronic Borrowers of any dispute concerning, or claimed
nonconformity of, any of the goods or services from the sale of
which the Account arose; (g) the Account is not outstanding more
than ninety (90) days from the date of the invoice therefor; (h)
the Account is not owing by any Account Debtor for which the
Lender has deemed fifty percent (50%) or more of such Account
Debtor's other Accounts (or any portion thereof) due to the
Conceptronic Borrowers to be non-Eligible Receivables; (i) the
Account does not arise out of a contract with, or order from, an
Account Debtor that, by its terms, forbids or makes void or
unenforceable the assignment by the Conceptronic Borrowers to the
Lender of the Account arising with respect thereto; (j) the
Account Debtor is not a Subsidiary or other Affiliate of the
Conceptronic Borrowers; (k) the Account Debtor is not a
governmental authority or agency, domestic or foreign; (l) the
Account, is from a foreign Account Debtor from either a division
of a multinational corporation approved by the Lender or from an
overseas manufacturers representative; (m) Conceptronic Borrowers
are not indebted in any manner to the Account Debtor, with the
exception of customary credits, adjustments and/or discounts
given to an Account Debtor by the Conceptronic Borrowers in the
ordinary course of their business, (n) no part of the Account
represents a progress billing or a retainage, (o) no bond has
been issued or is contemplated with respect to the goods or
services furnished by the Conceptronic Borrowers or with respect
to the project or contract for which those goods or services were
furnished, and (p) the Lender in the exercise of its sole and
absolute discretion has not deemed the Account ineligible because
of uncertainty as to the creditworthiness of the Account Debtor
or because the Lender otherwise considers the collateral value
thereof to the Lender to be impaired or its ability to realize
such value to be insecure. In the event of any dispute, under
the foregoing criteria, as to whether an Account is, or has
ceased to be, an Eligible Receivable, the decision of the Lender
in the exercise of its sole and absolute discretion shall con
trol.
"Enforcement Costs" shall mean all expenses, charges,
costs and fees whatsoever (including, without limitation,
attorney's fees and expenses) of any nature whatsoever paid or
incurred by or on behalf of the Lender in connection with (a) the
collection or enforcement of any or all of the Obligations, (b)
the preparation of or changes to this Agreement, the Notes, the
Security Documents and/or any of the other Financing Documents,
(c) the creation, perfection, collection, maintenance,
preservation, defense, protection, realization upon, disposition,
sale or enforcement of all or any part of the Collateral,
including, without limitation, those sums paid or advanced, and
costs and expenses, more specifically described in Section 10.03,
and (d) the monitoring, administration, processing, servicing of
any or all of the Obligations and/or the Collateral.
"Equipment" shall mean all equipment, machinery,
furniture and fixtures and supplies of every nature, presently
existing or hereafter acquired or created and wherever located,
together with all accessions, additions, fittings, accessories,
special tools, and improvements thereto and substitutions there
for and all parts and equipment which may be attached to or which
are necessary for the operation and use of such personal proper
ty, whether or not the same shall be deemed to be affixed to real
property, and all rights under or arising out of present or
future contracts relating to the foregoing and all proceeds (cash
and non-cash) of the foregoing.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Event of Default" means an event which, with the
giving of notice or lapse of time, or both, could or would
constitute a Default under the provisions of this Agreement.
"Facility 4 Loan Committed Amount" has the meaning
described in Section 2.04 herein.
"Facility 4 Loan Borrowing Base" means the sum of (a)
eighty percent (80%) of the book value of Eligible Receivables
(the "Receivable Borrowing Base") and (b) thirty five percent
(35%) of the book value of Eligible Inventory, which shall not
exceed at any time the Receivable Borrowing Base.
"Fee Period" means a quarterly period starting with the
calendar quarter ending December 31, 1997
"Fees" means the fees described in Sections 2.06 and
2.07 hereof.
"Financing Documents" means at any time collectively
and include this Agreement, each Note, the Security Documents,
the Interest Rate Protection Agreement, and any other instrument,
agreement or document previously, simultaneously or hereafter
executed and delivered by the Borrowers and/or any other Person,
singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with any of the Obliga
tions and/or in connection with this Agreement, any Note, any of
the Security Documents, any of the credit Facilities, and/or any
of the Obligations.
"Funded Senior Debt" means all indebtedness of the
Borrowers, including the value of all capitalized leases.
"GAAP" shall mean generally accepted accounting princi
ples in the United States of America in effect from time to time.
"General Intangibles" shall mean all general intangi
bles of every nature, whether presently existing or hereafter
acquired or created, including without limitation all books,
correspondence, credit files, records, computer programs, comput
er tapes, cards and other papers and documents in the possession
or control of the Borrowers, claims (including without limitation
all claims for income tax and other refunds), choses in action,
contract rights, judgments, patents, patent licenses, trademarks,
trademark licenses, licensing agreements, rights in intellectual
property, Goodwill (including all Goodwill of the Borrowers'
business symbolized by and associated with any and all trade
marks, trademark licenses, copyrights and/or service marks),
royalty payments, contractual rights, rights as lessee under any
lease of real or personal property, literary rights, copyrights,
service names, service marks, logos, trade secrets, all amounts
received as an award in or settlement of a suit in damages,
deposit accounts, interests in joint ventures or general or
limited partnerships, rights in applications for any of the
foregoing, and all proceeds (cash and non-cash) of the foregoing.
"Governmental Authority" means any nation or govern
ment, any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Materials" means (a) any "hazardous waste"
as defined by the Resource Conservation and Recovery Act of 1976,
as amended from time to time, and regulations promulgated there
under; (b) any "hazardous substance" as defined by the Comprehen
sive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, and regulations promulgated
thereunder; (c) any substance the presence of which on any
property now or hereafter owned or acquired by the Borrowers is
prohibited by any Law similar to those set forth in this defini
tion; and (d) any other substance which by Law requires special
handling in its collection, storage, treatment or disposal.
"Hazardous Materials Contamination" means the contamin
ation (whether presently existing or occurring after the date of
this Agreement) by Hazardous Materials of any property owned,
operated or controlled by the Borrowers or for which the
Borrowers have responsibility, including, without limitation,
improvements, facilities, soil, ground water, air or other
elements on, or of, any property now or hereafter owned or
acquired by the, and any other contamination by Hazardous
Materials for which the Borrowers are, or are claimed to be,
responsible.
"Indebtedness for Borrowed Money" of a Person, at any
time shall mean the sum at such time of (a) indebtedness of such
Person for borrowed money or for the deferred purchase price of
property or services, (b) any obligations of such Person in
respect of letters of credit, banker's or other acceptances or
similar obligations issued or created for the account of such
Person, (c) lease obligations of such Person which have been or
should be, in accordance with GAAP, capitalized on the books of
such Person, (d) all liabilities secured by any Lien on any
property owned by such Person, to the extent attached to such
Person's interest in such property, even though such Person has
not assumed or become liable for the payment thereof, and (e) any
obligation of such Person or a commonly controlled entity to a
multiemployer plan (as those terms are used under applicable
ERISA statutes and regulations).
"Inventory" means all inventory of the Borrowers,
including, without limitation all packing, shipping, advertising,
and promotional materials, and all documents of title or
documents representing the same, all general intangibles
necessary or beneficial for the disposition of the same, and all
proceeds (cash and non-cash) of the foregoing.
"Interest Rate Protection Agreement" means an interest
rate protection agreement with the Lender or another financial
institution acceptable to the Lender in a notational amount equal
to the outstanding principal balance of the Facility 1 Note and
the Facility 2 Note, with the Borrowers paying a fixed rate and
receiving a floating rate, all on terms and subject to such
conditions as shall be reasonably acceptable to the Lender.
"Items of Payment" means each check, draft, cash,
money, instrument, item, and other remittance in payment or on
account of payment of the Accounts or otherwise with respect to
any Collateral, including, without limitation, cash proceeds of
any returned, rejected or repossessed Goods, the sale or lease of
which gave rise to an Account, and other proceeds or products of
Collateral; and "Items of Payment" means the collective reference
to all of the foregoing.
"Law" or "Laws" means all ordinances, statutes, rules,
regulations, orders, injunctions, writs, or decrees of any
Governmental Authority or political subdivision or agency
thereof, or any court or similar entity established by any
thereof.
"Leases" means all of the Borrowers' present and future
right, title and interest in and to any and all equipment leases,
licensing and maintenance agreements and other understandings of
or relating to the use, enjoyment of any Inventory or Equipment
now or hereafter leased by the Borrowers, as lessor.
"Liabilities" means, at any time, all liabilities that
should, in accordance with GAAP consistently applied, be classi
fied as liabilities on a balance sheet of the Borrowers.
"Lien" means any mortgage, deed of trust, deed to
secure debt, grant, pledge, security interest, assignment,
encumbrance, judgment, lien or charge of any kind, whether
perfected or unperfected, avoidable or unavoidable, including,
without limitation, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction, excluding the precautionary
filing of any financing statement by any lessor in a true lease
transaction, by any xxxxxx in a true bailment transaction or by
any consignor in a true consignment transaction under the Uniform
Commercial Code of any jurisdiction or the agreement to give any
financing statement by any lessee in a true lease transaction, by
any bailee in a true bailment transaction or by any consignee in
a true consignment transaction.
"Loan" means a Facility 1 Loan, a Facility 2 Loan, any
Facility 2 Term Loan, a Facility 3 Loan, or a Facility 4 Loan as
the case may be, and "Loans" mean the Facility 1 Loan, the
Facility 2 Loan, each Facility 2 Term Loan, the Facility 3 Loan
and the Facility 4 Loan.
"Motor Vehicles" means all of the Borrowers' motor
vehicles, together with all additions, parts, accessories,
special tools, attachments and accessions now and hereafter
affixed thereto and/or used in connection therewith, and all cash
and non-cash proceeds thereof.
"Multiemployer Plan" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Net Worth" means, at any time, the excess of (a)
Assets, over (b) Liabilities.
"Note" means the Facility 1 Note, the Facility 2 Note,
each Facility 2 Term Note, the Facility 3 Note or the Facility 4
Note, as the case may be, and "Notes" mean collectively the
Facility 1 Note, the Facility 2 Note, each Facility 2 Term Note,
the Facility 3 Note and the Facility 4 Note, and any other
promissory note which may from time to time evidence the
Obligations.
"Obligations" means all present and future debts,
obligations, and liabilities, whether now existing or contemplat
ed or hereafter arising, of the Borrowers to the Lender under,
arising pursuant to, in connection with and/or on account of the
provisions of this Agreement, the Notes, each Security Document,
and any of the other Financing Documents, any of the Loans, and
any of the Loans including, without limitation, the principal of,
and interest on, the Notes, late charges, Enforcement Costs, and
other prepayment penalties (if any), letter of credit fees or
fees charged with respect to any guaranty of any letter of
credit, and also means all other present and future indebtedness,
liabilities and obligations, now or hereafter becoming due or
owing by the Borrowers to the Lender under or in connection with
any "swap agreement" as defined in 11 U.S.C. 101 and/or the
Interest Rate Protection Agreement, and also means all other
present and future indebtedness, liabilities and obligations,
whether now existing or contemplated or hereafter arising, of the
Borrowers to the Lender of any nature whatsoever regardless of
whether such debts, obligations and liabilities be direct,
indirect, primary, secondary, joint, several, joint and several,
fixed or contingent; and any and all renewals, extensions and
rearrangements of any such debts, obligations and liabilities.
"Overdraft" means any excess of debit entries over
collected funds on deposit in any banking account of the
Borrowers.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means: (a) Liens for Taxes which are
not delinquent or which the Lender has determined in the exercise
of its sole and absolute discretion (i) are being diligently
contested in good faith and by appropriate proceedings, (ii) the
Borrowers have the financial ability to pay, with all penalties
and interest, at all times without materially and adversely
affecting the Borrowers, and (iii) are not, and will not be with
appropriate filing, the giving of notice and/or the passage of
time, entitled to priority over any Lien of the Lender; (b)
deposits or pledges to secure obligations under worker's compen
sation, social security or similar laws, or under unemployment
insurance in the ordinary course of business; (c) Liens in favor
of the Lender; (d) judgment Liens to the extent the entry of such
judgment does not constitute an Event of Default under the terms
of this Agreement or result in the sale of, or levy of execution
on, any of the Collateral; and (e) such other Liens, if any, as
are set forth on EXHIBIT C attached hereto and made a part
hereof.
"Person" shall mean and include an individual, a
corporation, a partnership, a joint venture, a limited liability
company, a trust, an unincorporated association, a government or
political subdivision or agency thereof or any other entity.
"Reportable Event" shall mean any of the events set
forth in Section 4043(b) of ERISA or the regulations thereunder.
"Responsible Officer" means the chief executive officer
of each of the Borrowers or the president of each of the
Borrowers or, with respect to financial matters, the chief
financial officer of each of the Borrowers.
"Revolving Loan Account" has the meaning described in
Section 2.06.
"Security Documents" shall mean collectively any
assignment, pledge agreement, security agreement, mortgage, deed
of trust, deed to secure debt, financing statement and any
similar instrument, document or agreement under or pursuant to
which a Lien is now or hereafter granted to, or for the benefit
of, the Lender on any collateral to secure the Obligations, as
the same may from time to time be amended, restated, supplemented
or otherwise modified.
"Senior Management" shall be deemed to refer to the
following executive positions: Chairman and Chief Executive
Officer, President, Executive Vice President and Chief Financial
Officer.
"Solvent" means with respect to each Borrower, that
(i) the fair value of all of such Borrower's properties and
assets exceed the total amount of such Borrower's Indebtedness,
(ii) it is able to pay its debts as they mature, (iii) it does
not have unreasonably small capital for the business in which it
is engaged or for any business or transaction in which it is
about to engage and (iv) it is not "insolvent@ as such term is
defined in Section 101 (31) of Title 11 of the United States
Code, 11.U.S.C. Section 101, et seq.
"State" means the State of Maryland.
"Subordinated Indebtedness" means all other
Indebtedness incurred at any time by any of the Borrowers, the
repayment of which is subordinated to the Obligations by a
written agreement in form and substance satisfactory to the
Lender in its sole and absolute discretion.
"Subsidiary" means any corporation the majority of the
voting shares of which at the time are owned directly by any
Borrower and/or by one or more Subsidiaries of any of the
Borrowers.
"Tangible Net Worth" means, at any time, the sum at
such time of: (a) the Net Worth less the total of (i) all assets
which would be classified as intangible assets under GAAP,
including, but not limited to goodwill, trademarks, trademark
applications, trade names, service marks, patent applications and
licenses, and deferred charges, (ii) capitalized organization and
finance costs, (iii) residual values of operating leases and
sales type leases, (iv) applicable reserves, allowances and other
similar properly deductible items to the extent such reserves,
allowances and other similar properly deductible items have not
been previously deducted by the Lender in the calculation of Net
Worth, (v) any revaluation or other write-up in book value of
assets subsequent to the date of the most recent financial
statements delivered to the Lender, and (vi) the amount of all
loans and advances to, or investments in, any Person, excluding
cash equivalents and deposit accounts maintained by the Borrowers
with any financial institution, plus (b) Subordinated
Indebtedness.
"Taxes" mean all taxes and assessments whether general
or special, ordinary or extraordinary, or foreseen or unforeseen,
of every character (including all penalties or interest thereon),
which at any time may be assessed, levied, confirmed or imposed
by any Governmental Authority on the Borrowers or any of their
properties or assets or any part thereof or in respect of any of
their franchises, businesses, income or profits.
"Wholly Owned Subsidiary" means any domestic United
States corporation all the shares of stock of all classes of
which (other than directors' qualifying shares) at the time are
owned directly or indirectly by the any of the Borrowers and/or
by one or more Wholly Owned Subsidiaries of any of the Borrowers.
SECTION I.2 Accounting Terms and Other Definitional
Provisions. Unless otherwise defined herein, as used in this
Agreement and in any certificate, report or other document made
or delivered pursuant hereto, accounting terms not otherwise
defined herein, and accounting terms only partly defined herein,
to the extent not defined, shall have the respective meanings
given to them under GAAP. Unless otherwise defined herein, all
terms used herein which are defined by the Maryland Uniform
Commercial Code shall have the same meanings as assigned to them
by the Maryland Uniform Commercial Code unless and to the extent
varied by this Agreement. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agree
ment shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section, subsection,
schedule and exhibit references are references to Sections or
subsections of, or schedules or exhibits to, as the case may be,
this Agreement unless otherwise specified. As used herein, the
singular number shall include the plural, the plural the singular
and the use of the masculine, feminine or neuter gender shall
include all genders, as the context may require. Reference to
any one or more of the Financing Documents and any of the
Financing Documents shall mean the same as the foregoing may from
time to time be amended, restated, substituted, extended,
renewed, supplemented or otherwise modified.
II. BORROWING
SECTION II.1 The Facility 1 Loan. (a)The Lender agrees to
lend to the White Mountain Borrowers and the White Mountain
Borrowers agree to borrow from the Lender the principal sum of
Four Million and No/100 Dollars ($4,000,000.00) (the "Facility 1
Loan"). The joint and several obligation of the White Mountain
Borrowers to repay the Facility 1 Loan shall be evidenced by the
White Mountain Borrowers' Promissory Note of even date herewith
(the "Facility 1 Note") payable to the Lender in the form
attached hereto as EXHIBIT A-1. The Facility 1 Note shall bear
interest and shall be repaid by the White Mountain Borrowers in
the manner and at the times set forth in the Facility 1 Note.
(b) The proceeds of the Facility 1 Loan shall be used
by the White Mountain Borrowers for the purposes set forth in
Recital A above, and, unless prior written consent of the Lender
is obtained, for no other purpose.
(c) The White Mountain Borrowers may prepay the
principal sum outstanding on the Facility 1 Loan only in
accordance with the terms of the Facility 1 Note. Sums borrowed
and repaid may not be readvanced.
SECTION II.2 The Facility 2 Loan. (a)The Lender agrees to
lend to the White Mountain Borrowers on a revolving basis from
time to time the maximum principal amount of Three Million Five
Hundred Thousand and No/100 Dollars ($3,500,000.00) (the
"Facility 2 Loan"). The joint and several obligation of the
White Mountain Borrowers to repay the advances under the Facility
2 Loan shall be evidenced by the White Mountain Borrowers'
Facility 2 Note of even date herewith (the "Facility 2 Note")
payable to the Lender in the form attached hereto as EXHIBIT A-2.
Advances under the Facility 2 Loan shall be converted to one or
more term loans (the "Facility 2 Term Loans" and each a "Facility
2 Term Loan") at the times and in such amounts as required
pursuant to the terms of this Agreement. At the time of each
conversion of principal outstanding under the Facility 2 Loan to
a Facility 2 Term Loan (each such date being called a "Conversion
Date"), the White Mountain Borrowers shall execute and deliver to
the Lender a Facility 2 Term Note (each a "Facility 2 Term Note"
and collectively, the "Facility 2 Term Notes") payable to the
Lender in the form attached hereto as EXHIBIT A-3. The White
Mountain Borrowers agree that the outstanding principal amount
under the Facility 2 Note shall be converted into fully
amortizing term loans on the earlier of (i) the date on which
the outstanding balance thereof exceeds $750,000, or (ii) the
date which is six (6) months from the date of the execution and
delivery of the Facility 2 Note or the immediately preceding
Conversion Date. The Facility 2 Note and each Facility 2 Term
Note shall bear interest and shall be repaid by the White
Mountain Borrowers in the manner and at the times set forth in
the Facility 2 Note and each Facility 2 Term Note, as the case
may be.
(b) The White Mountain Borrowers may prepay the
principal sum outstanding on the Facility 2 Loan only in
accordance with the terms of the Facility 2 Note and each
Facility 2 Term Note. Sums borrowed and repaid may be readvanced
under the Facility 2 Note, subject to the terms and conditions of
this Agreement.
(c) The proceeds of the Facility 2 Loan shall be used
by the White Mountain Borrowers for the purposes set forth in
Recital A above, and, unless prior written consent of the Lender
is obtained, for no other purpose.
SECTION II.3 The Facility 3 Loan. (a)The Lender agrees
to lend to the White Mountain Borrowers on a revolving basis from
time to time the maximum principal amount of Three Million and
No/100 Dollars ($3,000,000.00) (the "Facility 3 Loan"). The
joint and several obligation of the White Mountain Borrowers to
repay the advances under the Facility 3 Loan shall be evidenced
by the White Mountain Borrowers' Facility 3 Note of even date
herewith (the "Facility 3 Note") payable to the Lender in the
form attached hereto as EXHIBIT A-4. The Facility 3 Note shall
bear interest and shall be repaid by the White Mountain Borrowers
in the manner and at the times set forth in the Facility 3 Note.
(b) The White Mountain Borrowers may prepay the
principal sum outstanding on the Facility 3 Loan only in
accordance with the terms of the Facility 3 Note. Sums borrowed
and repaid may be readvanced under the terms and conditions of
this Agreement.
(c) The proceeds of the Facility 3 Loan shall be used
by the White Mountain Borrowers for the purposes set forth in
Recital A above, and, unless prior written consent of the Lender
is obtained, for no other purpose.
SECTION II.4 The Facility 4 Loan. (a) The Lender
agrees to lend to the Conceptronic Borrowers on a revolving basis
from time to time the principal amount (the "Facility 4 Loan")
not to exceed at any time outstanding the lesser of One Million
Five Hundred Thousand and No/100 Dollars ($1,500,000.00) or the
Facility 4 Loan Borrowing Base (the "Facility 4 Loan Committed
Amount").
(b) If at any time the outstanding principal balance
of the Facility 4 Loan exceeds the limitations provided in
subsection (a) above, the Conceptronic Borrowers promise to pay
to the order of the Lender, on demand, the amount of the excess.
(c) The joint and several obligation of the
Conceptronic Borrowers to repay the advances under the Facility 4
Loan shall be evidenced by the Conceptronic Borrowers' Facility 4
Revolving Promissory Note of even date herewith (the "Facility 4
Note") payable to the Lender in the form attached hereto as
EXHIBIT A-5. The Facility 4 Note shall bear interest and shall
be repaid by the Conceptronic Borrowers in the manner and at the
times set forth in the Facility 4 Note.
(d) The Conceptronic Borrowers may prepay the
principal sum outstanding on the Facility 4 Loan only in
accordance with the terms of the Facility 4 Note. Sums borrowed
and repaid may be readvanced under the terms and conditions of
this Agreement.
(e) The proceeds of the Facility 4 Loan shall be used
by the Conceptronic Borrowers for the purposes set forth in
Recital A above, and, unless prior written consent of the Lender
is obtained, for no other purpose.
SECTION II.5 Advance Loan Procedure. (a) Arguss shall
notify the Lender not later than 12:00 Noon (Washington, D.C.
time) on the date of each proposed advance.
(b) The Conceptronic Borrowers shall furnish to the
Lender such schedules, certificates, lists, records, reports,
information and documents as required by the Lender from time to
time so that the Lender may, in its discretion, determine the
Facility 4 Loan Borrowing Base.
(c) In addition, the Borrowers hereby irrevocably
authorize the Lender to make advances under the Loans at any time
and from time to time, without further request from or notice to
the Borrowers, which the Lender, in its sole and absolute
discretion, deems necessary or appropriate to protect the
Lender's interests under this Agreement or otherwise, including,
without limitation, advances made to cover Overdrafts, principal
of, and/or interest on, any Loans, fees, and/or Enforcement
Costs, prior to, on, or after the termination of this Agreement,
regardless of whether the aggregate amount of the advances which
the Lender may make hereunder exceeds any Loan amount. The
Lender shall have no obligation whatsoever to make any advance
under this subsection and the making of one or more advances
under this subsection shall not obligate the Lender to make other
similar advance or advances. Any such advances will be secured
by the Collateral.
SECTION II.6 Revolving Loan Account. The Lender will
establish and maintain a loan account on its books (the "Revolv
ing Loan Account") to which the Lender will (a) debit (i) the
principal amount of each advance (the "Revolving Loans") made by
the Lender hereunder as of the date made, (ii) the amount of any
interest accrued on the Revolving Loans as and when due, and (ii)
any other amounts due and payable by any or all of the Borrowers
to the Lender from time to time under the provisions of this
Agreement in connection with the Revolving Loans, including,
without limitation, Enforcement Costs, Fees, late charges, and
service, collection and audit fees, as and when due and payable,
and (b) credit all payments made by the Borrowers to the Lender
on account of the Revolving Loans as of the date made including,
without limitation, funds credited to the Collateral Account and
collected and paid to the Lender, the Lender reserving the right,
exercised in its sole and absolute discretion from time to time,
to provide earlier credit or to disallow credit for any
Collection which is unsatisfactory to the Lender.
The Lender may debit the Revolving Loan Account for the
amount of any Collection which is returned to the Lender unpaid.
All credit entries to the Revolving Loan Account are conditional
and shall be readjusted as of the date made if final and
indefeasible payment is not received by the Lender in cash or
solvent credits. The Borrowers hereby jointly and severally
promise to pay to the order of the Lender, on demand, an amount
equal to the excess, if any, of all debit entries over all credit
entries recorded in the Revolving Loan Account under the
provisions of this Agreement.
SECTION II.7 Lock Box Account. The Borrowers shall, if
so directed by the Lender, establish a lock box to which Items of
Payments may be sent and shall direct the Borrowers' customers
and others as the Lender may require to forward payments to that
lock box. Items of Payment received in the lock box shall be
deposited into the Borrowers' operating account maintained with
the Lender, or after an Event of Default, as directed by the
Lender.
SECTION II.8 Unused Fees. The White Mountain Borrowers
jointly and severally agree to pay to the Lender on the first day
of each Fee Period commencing after the date of this Agreement an
unused loan fee (computed on the basis of a year consisting of
three hundred and sixty (360) days for the actual number of days
elapsed) of one half of one percent (.5%) per annum on the daily
average of the unused amount of the Facility 2 Loan. The
Conceptronic Borrowers jointly and severally agree to pay to the
Lender on the first day of each Fee Period commencing after the
date of this Agreement an unused loan fee (computed on the basis
of a year consisting of three hundred and sixty (360) days for
the actual number of days elapsed) of one percent (1.0%) per
annum on the daily average of the unused amount of the Facility 4
Loan.
SECTION II.9 Commitment Fee. The Borrowers agree to pay a
commitment fee in the amount of $25,000 in connection with the
Loans, one half ($12,500) of which was paid to the Lender at the
execution of the commitment letter; the balance of $12,500 shall
be paid on the date of the execution of this Agreement.
SECTION II.10 Transactions under this Agreement Between the
Borrowers and the Lender. In respect to any advance and all
other matters under or in connection with this Agreement and any
transactions contemplated hereby, the Borrowers authorize the
Lender to accept, rely upon, act upon and comply with, any verbal
or written instructions, requests, confirmations and orders of
any employee or representative of the Borrowers designated by the
Borrowers in writing delivered to the Lender from time to time.
The Borrowers acknowledge that the transmission between the
Borrowers and the Lender of any such instructions, requests,
confirmations and orders involves the possibility of errors,
omissions, mistakes and discrepancies and agrees to adopt such
internal measures and operational procedures to protect their
interests. By reason thereof, the Borrowers hereby assume all
risk of loss and responsibility for, releases and discharges the
Lender from any and all responsibility or liability for, and
agrees to indemnify, reimburse on demand and hold the Lender
harmless from, any and all claims, actions, damages, losses,
liability and expenses by reason of, arising out of or in any way
connected with or related to, (i) the Lender's acceptance,
reliance and actions upon, compliance with or observation of any
such instructions, requests, confirmations or orders, and (ii)
any such errors, omissions, mistakes and discrepancies, except
those caused by the Lender's gross negligence or willful miscon
duct.
SECTION II.11 Account Statements. Any and all periodic or
other statements or reconciliations, and the information
contained in those statements or reconciliations, of the
Revolving Loan Account shall be presumed conclusively to be
correct and shall constitute an account stated between the Lender
and the Borrowers unless the Lender receives specific written
objection thereto from the Borrowers within thirty (30) Banking
Days after such statement or reconciliation shall have been sent
by the Lender.
SECTION II.12 Overdraft Advances. If, after the close of
business on any Banking Day, any banking account of the Borrowers
with the Lender is determined by the Lender to have an Overdraft,
the Lender, in its sole discretion on each and any such occasion
may (and is hereby irrevocably authorized by the Borrowers to),
but is not obligated to, make an advance under any of the
Revolving Loans to the Borrowers in a principal amount equal to
any such Overdraft as of the close of business on such Banking
Day. All Overdrafts shall be secured by the Collateral.
III. COLLATERAL
As security for the payment of all of the Obligations, the
Borrowers hereby assign, grant and convey to the Lender and agree
that the Lender shall have a perfected, continuing security
interest in all of the Collateral. The Borrowers further agree
that the Lender shall have in respect the Collateral all of the
rights and remedies of a secured party under the Maryland Uniform
Commercial Code and under other applicable Laws and Security
Documents, as well as those provided in this Agreement. The
Borrowers covenant and agree to execute and deliver such
financing statements and other instruments and filings as are
necessary in the opinion of the Lender to perfect such security
interest. Notwithstanding the fact that the proceeds of the Col
lateral constitute a part of the Collateral, the Borrowers may
not dispose of the Collateral, or any part thereof, other than in
the ordinary course of their business or as otherwise may be
permitted by this Agreement.
IV. UNCONDITIONAL OBLIGATIONS
The payment and performance by the Borrowers of the Obliga
tions shall be absolute and unconditional, irrespective of any
defense or any rights of set-off, recoupment or counterclaim it
might otherwise have against the Lender and the Borrowers shall
pay absolutely net all of the Obligations, free of any deductions
and without abatement, diminution or set-off; and until payment
in full of all of the Obligations, the Borrowers: (a) will not
suspend or discontinue any payments provided for in the Notes;
(b) will perform and observe all of their other agreements con
tained in this Agreement, including (without limitation) all
payments required to be made to the Lender; and (c) will not
terminate or attempt to terminate this Agreement for any cause.
V. REPRESENTATIONS AND WARRANTIES
To induce the Lender to make the Loans, the Borrowers repre
sent and warrant to the Lender and, unless the Lender is notified
by the Borrowers of a change or changes effecting such
representations and warranties, shall be deemed to represent and
warrant to the Lender at the time each request for an advance
under the Loans is submitted and again at the time any advance is
made under the Loans that:
SECTION V.1 Subsidiaries. Except as set forth in
Schedule 5.01 attached hereto, the Borrowers have no Subsidiar
ies.
SECTION V.2 Solvency. Each of the Borrowers are Solvent.
SECTION V.3 Good Standing. Each of the Borrowers (a) is
a corporation duly organized, existing and in good standing under
the laws of the jurisdiction of its incorporation, (b) has the
corporate power to own its property and to carry on its business
as now being conducted, and (c) is duly qualified to do business
and is in good standing in each jurisdiction in which the
character of the properties owned by it therein or in which the
transaction of its business makes such qualification necessary.
SECTION V.4 Power and Authority. Each of the Borrowers
have full power and authority to execute and deliver this
Agreement and each of the other Financing Documents executed and
delivered by it, to make the borrowing hereunder, and to incur
the Obligations, all of which have been duly authorized by all
proper and necessary corporate action. No consent or approval of
stockholders or of any public authority is required as a
condition to the validity or enforceability of this Agreement or
any of the other Financing Documents executed and delivered by
the Borrowers.
SECTION V.5 Binding Agreements. This Agreement and each
of the other Financing Documents executed and delivered by the
Borrowers have been properly executed by the Borrowers,
constitute valid and legally binding obligations of the
Borrowers, and are fully enforceable against the Borrowers in
accordance with their respective terms.
SECTION V.6 Litigation. There are no proceedings pending
or, so far as any of the Borrowers know, threatened before any
court or administrative agency which will materially adversely
affect the financial condition or operations of any of the
Borrowers or any Subsidiary, or the authority of the Borrowers to
enter into this Agreement or any of the other Financing Documents
executed and delivered by the Borrowers.
SECTION V.7 No Conflicting Agreements. There is (a) no
charter, by-law or preference stock provision of the Borrowers
and no provision of any existing mortgage, indenture, contract or
agreement binding on the Borrowers or affecting their property,
and (b) to the knowledge of the Borrowers, no provision of law or
order of court binding upon the Borrowers, which would conflict
with or in any way prevent the execution, delivery, or perfor
xxxxx of the terms of this Agreement or of any of the other
Financing Documents executed and delivered by the Borrowers, or
which would be violated as a result of such execution, delivery
or performance.
SECTION V.8 Financial Condition. The financial
statements of the Borrowers dated June 30, 1997 are complete and
correct and, in the opinion of the Borrowers, fairly present the
current financial condition of the Borrowers and have been pre
pared in accordance with GAAP applied on a consistent basis
throughout the period involved. There are no material
liabilities, direct or indirect, fixed or contingent, of the
Borrowers as of the date of such financial statements which are
not reflected therein or in the notes thereto. There has been no
adverse change in the financial condition or operations of the
Borrowers since the date of such financial statements (and to the
Borrowers' knowledge, no such adverse change is pending or
threatened), and the Borrowers have not guaranteed the
obligations of, or made any investments in or advances to, any
company, individual or other entity except as disclosed in such
financial statements.
SECTION V.9 Taxes. The Borrowers have filed or has
caused to have been filed all federal, state and local tax
returns which, to the knowledge of the Borrowers, are required to
be filed, and have paid or caused to have been paid all taxes as
shown on such returns or on any assessment received by them, to
the extent that such taxes have become due, unless and to the
extent only that such taxes, assessments and governmental charges
are currently contested in good faith and by appropriate
proceedings by the Borrowers and adequate reserves therefor have
been established as required under generally accepted accounting
principles.
SECTION V.10 Compliance With Law. The Borrowers are not
in violation of any law, ordinance, governmental rule or
regulation to which it is subject and the violation of which
would have a material adverse effect on the conduct of their
business, and the Borrowers have obtained any and all licenses,
permits, franchises or other governmental authorizations
necessary for the ownership of their properties and the conduct
of their business.
SECTION V.11 Place(s) of Business and Location of Collater
al. Each of the Borrowers warrant that the address of the
respective Borrowers' chief executive office is as specified in
EXHIBIT B attached hereto and made a part hereof and that the
address of each other place of business of each of the Borrowers,
if any, is as disclosed to the Lender in EXHIBIT B. The
Collateral and all books and records pertaining to the Collateral
are and will be located at the address indicated on EXHIBIT B.
The Borrowers will immediately advise the Lender in writing of
the opening of any new place of business or the closing of any of
their existing places of business, and of any change in the
location of the places where the Collateral, or any part thereof,
or the books and records concerning the Collateral, or any part
thereof, are kept. The proper and only places to file financing
statements with respect to the Collateral within the meaning of
the Uniform Commercial Code are the State Department of
Assessments and Taxation. A copy of a fully executed financing
statement shall be sufficient to satisfy for all purposes the
requirements of a financing statement as set forth in Article 9
of the Maryland Uniform Commercial Code.
SECTION V.12 Title to Properties. The Borrowers have good
and marketable title to all of their properties, including the
Collateral, and the Collateral is free and clear of mortgages,
pledges, liens, charges and other encumbrances other than the
Permitted Liens.
SECTION V.13 Margin Stock. None of the proceeds of any of
the Loans will be used, directly or indirectly, by the Borrowers
for the purpose of purchasing or carrying, or for the purpose of
reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any "margin security" within the
meaning of Regulation G (12 CFR Part 207), or "margin stock"
within the meaning of Regulation U (12 CFR Part 221), of the
Board of Governors of the Federal Reserve System (herein called
"margin security" and "margin stock") or for any other purpose
which might make the transactions contemplated herein a "purpose
credit" within the meaning of said Regulation G or Regulation U,
or cause this Agreement to violate any other regulation of the
Board of Governors of the Federal Reserve System or the
Securities Exchange Act of 1934 or the Small Business Investment
Act of 1958, as amended, or any rules or regulations promulgated
under any of such statutes.
SECTION V.14 ERISA. With respect to any "pension plan" as
defined in Section 3(2) of ERISA, which plan is now or previously
has been maintained or contributed to by the Borrowers and/or by
any Commonly Controlled Entity: (a) no "accumulated funding
deficiency" as defined in Code 412 or ERISA 302 has occurred,
whether or not that accumulated funding deficiency has been
waived; (b) no "reportable event" as defined in ERISA 4043 has
occurred; (c) no termination of any plan subject to Title IV of
ERISA has occurred; (d) neither the Borrowers nor any Commonly
Controlled Entity has incurred a "complete withdrawal" within the
meaning of ERISA 4203 from any multiemployer plan; (e) neither
the Borrowers nor any Commonly Controlled Entity has incurred a
"partial withdrawal" within the meaning of ERISA 4205 with
respect to any multiemployer plan; (f) no multiemployer plan to
which the Borrowers or any Commonly Controlled Entity has an
obligation to contribute is in "reorganization" within the
meaning of ERISA 4241 nor has notice been received by the
Borrowers or any Commonly Controlled Entity that such a multi
employer plan will be placed in "reorganization".
SECTION V.15 Governmental Consent. Neither the nature of
the Borrowers nor of their business or properties, nor any
relationship between the Borrowers and any other entity or
person, nor any circumstance in connection with the making of the
Loans, or the offer, issue, sale or delivery of the Notes is such
as to require a consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority,
on the part of the Borrowers, as a condition to the execution and
delivery of this Agreement or any of the other Financing
Documents, the borrowing of the principal amounts of the Loans or
the offer, issue, sale or delivery of the Notes.
SECTION V.16 Inventory. With respect to all Inventory of
the Borrowers, as reflected on the books and records of the
Borrowers, (a) such Inventory is of good and merchantable
quality, free from defects, and (b) such Inventory is not stored
with a bailee, warehouseman or similar party, and such Inventory
is located at the places of business indicated on EXHIBIT B.
SECTION V.17 Full Disclosure. The financial statements
referred to in this Part V do not, nor does this Agreement, nor
do any written statements furnished by the Borrowers to the
Lender in connection with the making of the Loans, contain any
untrue statement of fact or omit a fact necessary to make the
statements contained therein or herein not misleading. There is
no fact which the Borrowers have not disclosed to the Lender in
writing which materially adversely affects or, will or could
prove to materially adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the
Borrowers or the ability of the Borrowers to perform this
Agreement.
SECTION V.18 Presence of Hazardous Materials or Hazardous
Materials Contamination. To the best of the Borrowers'
knowledge, (a) no Hazardous Materials are located on any real
property owned, controlled or operated by any of the Borrowers or
for which any of the Borrowers are responsible, except for
reasonable quantities of necessary supplies for use by the
Borrowers in the ordinary course of the their current line of
business and stored, used and disposed in accordance with
applicable Laws; and (b) no property owned, controlled or
operated by the Borrowers have ever been used as a manufacturing,
storage, or dump site for Hazardous Materials nor is affected by
Hazardous Materials Contamination at any other property.
SECTION V.19 Intellectual Property. To the best of their
knowledge, the Borrowers own or possess all of the patents,
trademarks, service marks, trade names, copyrights and licenses
and all rights with respect thereto necessary for the present and
planned future operation of their business, without any conflict
with the rights of any other Person.
SECTION V.20 Business Names and Addresses. In the twelve
(12) years preceding the date hereof, the Borrowers have not
conducted business under any name other than their current name
nor conducted their business in any jurisdiction other than those
disclosed on EXHIBIT B attached hereto.
SECTION V.21 No Default. There is no Event of Default (as
hereinafter defined) and no event has occurred and no condition
exists which with the giving of notice or the passage of time
would constitute an Event of Default. The Borrowers are not in
default under the terms of any other agreement or instrument to
which it may be a party or by which the Collateral or any of
their properties may be bound or subject.
SECTION V.22 Compliance with Eligibility Standards.
Unless the Lender is advised by the Borrowers in writing to the
contrary, each Account and each lease described in any schedule,
certificate, record and data furnished to the Lender for purposes
of calculating the Facility 4 Borrowing Base will at all times
meet and comply with the eligibility requirements set forth in
this Agreement.
SECTION V.23 Accounts. With respect to all Accounts and
to the best of the Borrowers' knowledge (a) they are genuine, and
in all respects what they purport to be, and are not evidenced by
a judgment, an instrument, or chattel paper (unless such judgment
has been assigned and such instrument or chattel paper has been
endorsed and delivered to the Lender); (b) they represent undis
puted, bona fide transactions completed in accordance with the
terms and provisions contained in the invoices and purchase
orders relating thereto; (c) the goods sold (or services ren
dered) which resulted in the creation of the Accounts have been
delivered or rendered to and accepted by the Account Debtor; (d)
the amounts shown on the Borrowers' books and records, with
respect thereto are actually and absolutely owing to the
Borrowers and are not contingent for any reason; (e) no payments
have been or shall be made thereon except payments turned over to
the Lender by the Borrower; (f) there are no set-offs,
counterclaims or disputes known by the Borrowers or asserted with
respect thereto, and the Borrowers have made no agreement with
any Account Debtor thereof for any deduction or discount of the
sum payable thereunder except regular discounts allowed by the
Borrowers in the ordinary course of their business for prompt
payment; (g) there are no facts, events or occurrences known to
the Borrowers which in any way impair the validity or enforcement
thereof or tend to reduce the amount payable thereunder; (h) all
Account Debtors thereof, to the best of the Borrowers' knowledge,
have the capacity to contract; (i) the goods sold or transferred
or the services furnished giving rise thereto are not subject to
any liens except the security interest granted to the Lender by
this Agreement; (j) the Borrowers have no knowledge of any fact
or circumstance which would impair the validity or collectibility
thereof; and (k) there are no proceedings or actions known to the
Borrowers which are threatened or pending against any Account
Debtor which might result in any material adverse change in their
financial condition.
VI. CONDITIONS OF LENDING
The making of the Loans and any advance thereunder is
subject to the following conditions precedent:
SECTION VI.1 Opinion of Counsel for the Borrowers. On the
date hereof, the Lender shall receive the favorable written
opinion of counsel for the Borrowers satisfactory in all respects
to the Lender.
SECTION VI.2 Approval of Counsel for the Lender. All
legal matters incident to the Loans and all documents necessary
in the opinion of the Lender to make the Loans shall be
satisfactory in all material respects to counsel for the Lender.
SECTION VI.3 Supporting Documents. The Lender shall
receive on the date hereof: (a) a certificate of the Secretary
of each of the Borrowers, in a form acceptable to the Lender in
all respects, dated as of the date hereof and certifying (i) that
attached thereto is a true, complete and correct copy of
resolutions adopted by the Board of Directors of the Borrower
authorizing the execution and delivery of this Agreement, the
Notes and the other Financing Documents, and the Obligations, and
(ii) as to the incumbency and specimen signature of each officer
of each of the Borrowers executing this Agreement, the Notes and
the other Financing Documents, and a certification by the
President or any Vice President of each of the Borrowers as to
the incumbency and signature of the Secretary of each of the
Borrowers; (b) such other documents as the Lender may reasonably
require the Borrowers to execute, in form and substance
acceptable to the Lender; and (c) such additional information,
instruments, opinions, documents, certificates and reports as the
Lender may reasonably deem necessary.
SECTION VI.4 Financing Documents. All of the Financing
Documents required by the Lender shall be executed, delivered
and, if deemed necessary by the Lender, recorded, all at the sole
expense of the Borrowers.
SECTION VI.5 Insurance. The Borrowers shall have
satisfied the Lender that any and all insurance required by this
Agreement is in effect as of the date of this Agreement, and
that, to the extent required by the Financing Documents, the
Lender has been named as an insured lienholder.
SECTION VI.6 Security Documents. In order to perfect the
lien and security interest created by this Agreement, the Borrow
ers shall have executed and delivered to the Lender all financing
statements and Security Documents (in form and substance
acceptable to the Lender in its sole discretion) deemed necessary
by the Lender, in a sufficient number of counterparts for
recordation, and, at the Borrowers' sole expense, shall record
all such financing statements and Security Documents, or cause
them to be recorded, in all public offices deemed necessary by
the Lender.
SECTION VI.7 Termination Statements. The Lender shall
have received from creditors of the Borrowers confirmation that
they will execute and deliver to the Lender all termination state
ments covering the Collateral required by the Lender immediately
after closing.
SECTION VI.8 Compliance. At the time of the making of
each advance hereunder (a) the Borrowers shall have complied and
shall then be in compliance with all the terms, covenants and
conditions of this Agreement which are binding upon it, (b) there
shall exist no Event of Default and no event which, with the
giving of notice or the passage of time, or both, would
constitute an Event of Default, and (c) the representations and
warranties contained in Part V shall be true with the same
effect as though such representations and warranties had been
made at the time of the making of the advance.
SECTION VI.9 Interest Rate Protection Agreement. The
Borrowers shall execute and deliver to the Lender one or more
interest rate protection agreements.
VII. AFFIRMATIVE COVENANTS OF BORROWERS
Until payment in full and the performance of all of the
Obligations hereunder, the Borrowers each shall:
SECTION VII.1 Financial Statements. Furnish to the Lender:
(a) Annual Statements and Certificates. As soon as
available but in no event more than ninety one (91) days after
the close of each of Arguss' fiscal years, (i) a copy of the
audited consolidated financial statement and an unaudited
consolidating financial statement relating to Arguss, broken out
by business segment and otherwise in reasonable detail satis
factory to the Lender, prepared in accordance with GAAP and certi
fied by an independent certified public accountant satisfactory
to the Lender, which financial statement shall include a balance
sheet as at the end of such fiscal year, an income statement, a
statement of cash flow, and a reconciliation of shareholders'
equity, all prepared in a format acceptable to the Lender.
(b) Quarterly Statements and Certificates. As soon as
available but in no event more than forty-five (45) days after
the close of each of Arguss' fiscal quarters consolidated and
consolidating balance sheets of Arguss as at the close of such
period and income and expense statements for such period,
certified by the principal financial officer of Arguss and
accompanied by a certificate of that officer setting forth the
consolidated Net Worth of Arguss and accompanied by a
certificate of that officer setting forth the calculation of all
financial covenants under this Agreement and stating whether any
event has occurred which constitutes an Event of Default or which
would constitute an Event of Default with the giving of notice or
the lapse of time or both, and, if so, stating the facts with
respect thereto. In addition, Arguss shall provide the Lender
with a report for the period then ending, in such detail as the
Lender may reasonably request, an aging of the Borrowers'
Accounts, and finished goods inventory, all prepared in a format
acceptable to the Lender.
(c) Borrowing Base Reports. As soon as available but
in no event more than forty-five (45) days after the end of each
calendar month, the Conceptronic Borrowers shall deliver to the
Lender a fully completed certificate signed by a principal
financial officer of each of the Conceptronic Borrowers (each a
"Borrowing Base Certificate" and collectively, the "Borrowing
Base Certificates") as of such date in the form of EXHIBIT D
attached hereto. Each Borrowing Base Certificate shall be
effective only as accepted by the Lender (and with such revision,
if any, as the Lender may require as a condition to such
acceptance), such acceptance to be presumed unless the Lender
otherwise notifies the Conceptronic Borrowers within five (5)
Banking Days after receipt of such Borrowing Base Certificate.
(d) Compliance Certificate. As soon as available but
in no event more than forty-five (45) days after the end of each
fiscal quarter, the Borrowers shall deliver to the Lender a
certificate, certified by the principal financial officer of each
of the Borrowers, which shall indicate the Borrowers' compliance
or noncompliance with all financial, affirmative and negative
covenants, and shall detail the method of all such financial
covenants.
(e) Vehicle List. As soon as available but in no less
frequently than once every six (6) months, the Borrowers shall
deliver to the Lender a fully completed list of cable
construction related vehicles, which list shall include vehicle
identification numbers.
(f) Reports to SEC and to Stockholders. Arguss will
furnish to the Lender, promptly upon the filing or making
thereof, at least one (l) copy of all financial statements,
reports, notices and proxy statements sent by Arguss to its stock
holders, and of all regular and other reports filed by Arguss
with any securities exchange or with the Securities and Exchange
Commission.
(g) Additional Reports and Information. With reason
able promptness, such additional information, reports or state
ments as the Lender may from time to time reasonably request.
SECTION VII.2 Financial Covenants.
(a) Total Cash Flow to Total Cash Uses. Maintain, tested as
of the last day of each of Arguss' fiscal quarters for the four
(4) quarter period ending on that date, a ratio of (i) net
income, plus interest expense, plus depreciation expense, plus
amortization expense, less dividends paid in cash to (b) its
interest expense, plus scheduled principal repayments of debt and
capital leases for such year, not less than 1.2 to 1.0.
(b) Funded Senior Debt to EBIDTA. Maintain, tested as of
the last day of each of Arguss' fiscal quarters for the four (4)
quarter period ending on that date, a ratio of Funded Senior Debt
to EBIDTA of not greater than 2.5 to 1.0.
SECTION VII.3 Taxes and Claims. Pay and discharge all
taxes, assessments and governmental charges or levies imposed
upon them or any of their income or properties prior to the date
on which penalties attach thereto, and all lawful claims which,
if unpaid, might become a lien or charge upon any of their
properties; provided, however, the Borrowers shall not be
required to pay any such tax, assessment, charge, levy or claim,
the payment of which is being contested in good faith and by
proper proceedings.
SECTION VII.4 Corporate Existence. Maintain their
corporate existence in good standing in the jurisdiction in which
they are incorporated and in each jurisdiction where they is
required to register or qualify to do business.
SECTION VII.5 Compliance with Laws. Comply with all
applicable federal, state and local laws, rules and regulations
to which they are subject and the violation of which would have a
material adverse effect on the conduct of their business.
SECTION VII.6 Governmental Regulation. Promptly notify the
Lender in the event that any of the Borrowers receive any notice,
claim or demand from any governmental agency which alleges that
any of the Borrowers are in violation of any of the terms of, or
has failed to comply with any applicable order issued pursuant to
any federal or state statute regulating their operation and
business, including, but not limited to, the Occupational Safety
and Health Act and the Environmental Protection Act.
SECTION VII.7 Litigation. Give prompt notice in writing,
with a full description to the Lender, of all litigation and of
all proceedings before any court or any governmental or regulato
ry agency affecting any of the Borrowers which, if adversely
decided, would materially affect the conduct of any of the
Borrowers' business, the financial condition of any of the
Borrowers, or in any manner affect the Collateral.
SECTION VII.8 Use of Proceeds. Use the proceeds of the
Loans for the purpose or purposes set forth in Recital A above
and, without the prior written consent of the Lender, for no
other purpose or purposes.
SECTION VII.9 Maintenance of Properties. Keep and
maintain, their properties, whether owned in fee or otherwise,
or leased, in good operating condition; make all proper repairs,
renewals, replacements, additions and improvements thereto needed
to maintain such properties in good operating condition; comply
with the provisions of all leases to which they are a party or
under which they occupy property so as to prevent any loss or
forfeiture thereof or thereunder; and comply with all laws,
rules, regulations and orders applicable to their properties or
business or any part thereof.
SECTION VII.10 Other Liens, Security Interests, etc. Keep
their properties and assets, including, without limitation, the
Collateral, free from all liens, security interests and claims of
every kind and nature, other than the security interest granted
to the Lender pursuant to this Agreement.
SECTION VII.11 Books and Records. (a) Keep and maintain
accurate books and records, (b) make entries on such books and
records in form satisfactory to the Lender disclosing the
Lender's assignment of, and security interest in and lien on, the
Collateral and all collections received by the Borrowers on their
Accounts, (c) furnish to the Lender promptly upon request such
information, reports, contracts, invoices, lists of purchases of
Inventory (showing names, addresses and amount owing) and other
data concerning Account Debtors and the Borrowers' Accounts and
Inventory and all contracts and collection(s) relating thereto as
the Lender may from time to time specify, (d) unless the Lender
shall otherwise consent in writing, keep and maintain all such
books and records mentioned in (a) above only at the addresses
listed in EXHIBIT B, and (e) permit any Person designated by the
Lender to enter the premises of the Borrowers and examine, audit
and inspect the books and records at any reasonable time and from
time to time without notice.
SECTION VII.12 Business Names. Immediately notify the
Lender of any change in the name under which they conduct their
business.
SECTION VII.13 ERISA. Maintain at all times such bonding as
is required by ERISA. As soon as practicable and in any event
within 15 days after they know or have reason to know that, with
respect to any plan, a "reportable event" has occurred, the
Borrowers will deliver to the Lender a certificate signed by
their chief financial officer setting forth the details of such
"reportable event". The Borrowers shall agree that with respect
to any pension plan which the Borrowers and/or any Commonly
Controlled Entity maintains or contributes to, either now or in
the future, that: (a) such bonding as is required under ERISA
will be maintained; (b) as soon as practicable and in any event
within 15 days after the Borrowers or any Commonly Controlled
Entity knows or has reason to know that a "reportable event" has
occurred or is likely to occur, the Borrowers will deliver to the
Lender a certificate signed by their chief financial officer
setting forth the details of such "reportable event"; (c) within
15 days after notice is received by the Borrowers or any Commonly
Controlled Entity that any multiemployer plan has been or will be
placed in "reorganization" within the meaning of ERISA 4241, the
Borrowers will notify the Lender to that effect; and (d) upon the
Lender's request, the Borrowers will deliver to the Lender a copy
of the most recent actuarial report, financial statements and
annual report completed with respect to any "defined benefit
plan", as defined in ERISA 3(35).
SECTION VII.14 Management. Promptly notify the Lender of
any contemplated changes in their Senior Management subsequent to
the date hereof.
SECTION VII.15 Notification of Events of Default and Adverse
Developments. The Borrowers will promptly notify the Lender upon
obtaining knowledge of the occurrence of:
(a) any Event of Default;
(b) any Default;
(c) any event, development or circumstance whereby the
financial statements furnished hereunder fail in any material
respect to present fairly, in accordance with GAAP, the financial
condition and operational results of the Borrowers;
(d) any uninsured or partially uninsured loss through
fire, theft, liability or property damage in excess of Fifty
Thousand Dollars ($50,000);
(e) any judicial, administrative or arbitral
proceeding pending against the Borrowers and any judicial or
administrative proceeding known by the Borrowers to be threatened
against them which, if adversely decided, could materially
adversely affect their financial condition or operations (present
or prospective);
(f) any other development in the business or affairs
of the Borrowers which may be materially adverse;
in each case describing in detail satisfactory to the Lender the
nature thereof and, in the case of notification under clauses (i)
and (ii), the action the Borrowers propose to take with respect
thereto.
SECTION VII.16 Insurance Generally. Maintain insurance with
responsible insurance companies on such of their properties, in
such amounts and against such risks as is customarily maintained
by similar businesses operating in the same vicinity; maintain
general public liability insurance against claims for personal
injury, death or property damage in such amounts as are
satisfactory to the Lender and workmen's compensation insurance
in statutory amounts with such companies as are licensed to do
business in the state requiring the same; file with the Lender,
upon its request, a detailed list of the insurance then in effect
and stating the names of the insurance companies, the amounts and
rates of the insurance, dates of the expiration thereof and the
properties and risks covered thereby; and, within thirty (30)
days after notice in writing from the Lender, obtain such
additional insurance as the Lender may reasonably request.
SECTION VII.17 Insurance With Respect to Equipment and
Inventory. In addition to and not by way of limitation of
Section 7.17 above, maintain hazard insurance with fire and
extended coverage and with loss payable to the Lender on the
Equipment and Inventory in an amount at least equal to the fair
market value of the Equipment and Inventory (but in any event
sufficient to avoid any co-insurance obligations) and with a
specific endorsement to each such insurance policy pursuant to
which the insurer agrees to give the Lender at least thirty (30)
days written notice before any alteration or cancellation of such
insurance policy and that no act or default of the Borrowers
shall affect the right of the Lender to recover under such policy
in the event of loss or damage; file with the Lender, upon its
request, a detailed list of the insurance then in effect and
stating the names of the insurance companies, the amounts and
rates of the insurance, dates of the expiration thereof and the
properties and risks covered thereby; and, within thirty (30)
days after notice in writing from the Lender, obtain such
additional insurance as the Lender may reasonably request. The
Lender acknowledges that the current levels of hazard insurance
maintained by the Borrowers are satisfactory to the Lender. Upon
the occurrence of any casualty to any of the Equipment and/or
Inventory with a value of less than Fifty Thousand Dollars
($50,000), the Borrowers may replace such Equipment and/or
Inventory, provided, however, that any replaced Equipment and/or
Inventory is free and clear of any and all liens other than the
Permitted Liens.
SECTION VII.18 Maintenance of the Collateral. Not permit
anything to be done to the Collateral which may impair the value
thereof. The Lender, or an agent designated by the Lender, shall
be permitted to enter the premises of the Borrowers and examine,
audit and inspect the Collateral at any reasonable time and from
time to time without notice. The Lender shall not have any duty
to, and the Borrowers hereby release the Lender from all claims
of loss or damage caused by the delay or failure to collect or
enforce any of the Accounts or to, preserve any rights against
any other party with an interest in the Collateral.
SECTION VII.19 Inventory. With respect to the Inventory,
the Borrowers shall: (a) as soon as possible upon demand by the
Lender, execute and deliver to the Lender designations of
Inventory specifying the Borrowers' cost of Inventory, the retail
price thereof, and such other matters and information relating to
the Inventory as the Lender may reasonably request, (b) keep
correct and accurate records itemizing and describing the kind,
type, quality and quantity of Inventory, the Borrowers' cost
therefor and the selling price thereof, all of which records
shall be available to the officers, employees or agents of the
Lender upon demand for inspection and copying thereof, (c) not
store any of their Inventory with a bailee, warehouseman or
similar person without the Lender's prior written consent;
provided, however, in the event the Lender does consent to such
storage, the Borrower shall cause any such bailee, warehouseman
or similar person to issue and deliver to the Lender, in a form
acceptable to the Lender, warehouse receipts in the name of the
Lender evidencing the storage of Inventory, (d) permit the Lender
and its agents or representatives to inspect and examine the
Inventory at any time or times hereafter during the Borrowers'
usual business hours, and to check and test the same as to
quality, quantity, value and condition, and (e) acquire and
maintain all Inventory free from all liens, except the security
interest granted to the Lender pursuant to this Agreement and the
Permitted Liens.
SECTION VII.20 Other Liens, Security Interests, etc. Keep
the Collateral free from all liens, security interests and claims
of every kind and nature, other than the security interest
granted to the Lender pursuant to this Agreement and the Permit
xxx Liens.
SECTION VII.21 Defense of Title and Further Assurances. AT
THEIR EXPENSE DEFEND THE TITLE TO THE COLLATERAL (OR ANY PART
THEREOF), AND PROMPTLY UPON REQUEST EXECUTE, ACKNOWLEDGE AND
DELIVER ANY FINANCING STATEMENT, RENEWAL, AFFIDAVIT, DEED,
ASSIGNMENT, CONTINUATION STATEMENT, SECURITY AGREEMENT, CERTIFI
CATE OR OTHER DOCUMENT THE LENDER MAY REQUIRE IN ORDER TO PER
FECT, PRESERVE, MAINTAIN, PROTECT, CONTINUE AND/OR EXTEND THE
LIEN OR SECURITY INTEREST GRANTED TO THE LENDER UNDER THIS
AGREEMENT AND ITS PRIORITY. The Borrowers shall pay to the
Lender on demand all taxes, costs and expenses incurred by the
Lender in connection with the preparation, execution, recording
and filing of any such document or instrument.
SECTION VII.22 Subsequent Opinion of Counsel as to Recording
Requirements. Provide to the Lender a subsequent opinion of
counsel as to the filing, recording and other requirements with
which the Borrowers have complied to maintain the lien and
security interest in favor of the Lender in the Collateral in the
event that the Borrowers shall transfer their principal place of
business or the office where they keep their records pertaining
to the Accounts.
SECTION VII.23 Assignments of Accounts. Promptly, upon
request, execute and deliver to the Lender written assignments,
in form and content acceptable to the Lender, of specific Ac
counts or groups of Accounts; provided, however, the lien and/or
security interest granted to the Lender under this Agreement
shall not be limited in any way to or by the inclusion or exclu
sion of Accounts within such assignments. Such Accounts shall
secure payment of the Obligations and are not sold to the Lender
whether or not any assignment thereof, which is separate from
this Agreement, is in form absolute.
SECTION VII.24 Notice of Returned Goods, etc. Promptly
notify the Lender of the return, rejection or repossession of any
goods sold or delivered in respect of any Accounts, and of any
claims made in regard thereto. Whenever the Borrowers obtain
possession (by return, rejection, repossession or otherwise) of
any goods, the sale or lease of which gave rise to an Account,
the Borrowers will (unless the Lender shall otherwise consent in
writing) physically segregate such goods from the Borrowers'
other property, and label and hold such goods as trustee for the
Lender for such disposition as the Lender may direct.
SECTION VII.25 Collections. Until such time as the Lender
shall notify the Borrowers of the revocation of such privilege,
the Borrowers (a) shall at their own expense have the privilege
for the account of and in trust for the Lender of collecting its
Accounts and receiving in respect thereto all items of payment
and shall otherwise completely service all of the Accounts
including (i) the billing, posting and maintaining of complete
records applicable thereto, and (ii) the taking of such action
with respect to such Accounts as the Lender may request or in the
absence of such request, as the Borrowers may deem advisable; and
(b) may grant, in the ordinary course of business, to any Account
Debtor, any rebate, refund or adjustment to which the Account
Debtor may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall
have given rise to an Account. The Lender may, at its option, at
any time or from time to time after default hereunder, revoke the
collection privilege given to the Borrowers herein by either
giving notice of its assignment of, and lien on the Collateral to
the Account Debtors or giving notice of such revocation to the
Borrowers.
SECTION VII.26 Notice to Account Debtors and Escrow Account.
In the event (a) an Event of Default exists, (b) an event has
occurred or condition exists which, with the giving of notice or
the lapse of time will constitute an Event of Default, or (c)
demand has been made for any or all of the Obligations, promptly
upon the request of the Lender in such form and at such times as
specified by the Lender, give notice of the Lender's lien on the
Accounts to the Account Debtors requiring the Account Debtors to
make payments thereon directly to the Lender and promptly upon
receipt deposit the Items of Payment into an account from which
the Lender alone has power of access and withdrawal (the
"Collateral Account") in the original form received by the
Borrowers (except for the endorsement of the Borrowers where
necessary, which endorsement the Borrowers agree to make, and the
Lender, by its duly authorized officers or nominee, is also
hereby irrevocably authorized to make such endorsement on the
Borrowers' behalf). Pending deposit thereof to the Collateral
Account, the Borrowers shall not commingle any Items of Payment
with any of their other funds or property, but will hold them
separate and apart therefrom in trust and for the account of the
Lender until deposit to the Collateral Account or other delivery
thereof is made to the Lender. The Lender will in its discretion
apply the whole or any part of the collected funds credited to
the Collateral Account against the Obligations or credit such
collected funds to the depository account of the Borrowers with
the Lender, the order and method of such application to be in the
sole discretion of the Lender.
SECTION VII.27 Government Accounts. Immediately notify the
Lender if any of the Accounts arise out of contracts with the
United States or with any state or political subdivision thereof
or any department, agency or instrumentality of the United
States, or any state or political subdivision thereof, and
execute any instruments and take any steps required by the Lender
in order that all moneys due and to become due under such con
tracts shall be assigned to the Lender and notice thereof given
to the government under the Federal Assignment of Claims Act or
any other applicable law.
SECTION VII.28 Hazardous Materials; Contamination. The
Borrowers agree to (a) give notice to the Lender immediately upon
either Borrowers' acquiring knowledge of the presence of any
Hazardous Materials on any property owned or controlled by any of
the Borrowers or for which any of the Borrowers is responsible
or of any Hazardous Materials Contamination with a full
description thereof; (b) promptly comply with any Laws requiring
the removal, treatment or disposal of Hazardous Materials or
Hazardous Materials Contamination and provide the Lender with
satisfactory evidence of such compliance; (c) provide the Lender,
within thirty (30) days after a demand by the Lender, with a
bond, letter of credit or similar financial assurance evidencing
to the Lender's satisfaction that the necessary funds are
available to pay the cost of removing, treating, and disposing of
such Hazardous Materials or Hazardous Materials Contamination and
discharging any Lien which may be established as a result thereof
on any property owned or controlled by either Borrower or for
which either Borrower is responsible; and (d) defend, indemnify
and hold harmless the Lender and its agents, employees, trustees,
successors and assigns from any and all claims which may now or
in the future (whether before or after the termination of this
Agreement) be asserted as a result of the presence of any
Hazardous Materials on any property owned or controlled by any of
the Borrowers for which any of the Borrowers are responsible for
any Hazardous Materials Contamination. The Borrowers will permit
the Lender, its agents, contractors and employees to enter and
inspect any of the Borrowers' places of business or any other
property of the Borrowers at any reasonable times upon three (3)
days prior notice of the purposes of conduct an environmental
investigation and audit (including taking physical samples) to
ensure that the Borrowers are complying with the terms of this
Agreement, and the Borrowers shall promptly reimburse the Lender
on demand for the costs of any such environmental investigation
and audit. The Borrowers shall provide the Lender, its agents,
contractors, employees and representatives with access to and
copies of any and all data and document relating to or dealing
with any Hazardous Materials used, generated, manufactured,
stored or disposed of by Borrowers' business operations within
five (5) days of the request therefore.
VIII. NEGATIVE COVENANTS OF BORROWERS
Until payment in full and the performance of all of the
Obligations, without the prior written consent of the Lender, the
none of the Borrowers will, directly or indirectly:
SECTION VIII.1 Pledges. Create, incur, assume or suffer to
exist any Lien on any of the Collateral, whether now owned or
hereafter acquired, except for Permitted Liens.
SECTION VIII.2 Method of Accounting. Change the method of
accounting employed in the preparation of the financial state
ments furnished prior to the date of this Agreement to the Lender
pursuant to Part V of this Agreement, unless required to conform
to GAAP and on the condition that the Borrowers' accountants
shall furnish such information as the Lender may request to
reconcile the changes with the Borrowers' prior financial
statements.
SECTION VIII.3 Merger, Acquisition or Sale of Assets.
Without the prior written consent of the Lender, which consent
will not be unreasonably withheld, (i) enter into any merger or
consolidation or acquire all or substantially all the assets of
any Person (an "Acquisition") which are in industrial sectors
which are unrelated to any of the Borrowers' current businesses,
whose financial valuations are not consistent with any of the
Borrowers' prior acquisition valuations, or (ii) sell, lease or
otherwise dispose of any of their assets, except in the ordinary
course of any Borrower's business. The respective Borrower or
Borrowers shall submit, prior to the completion of any
Acquisition, a pro-forma compliance certificate, which
certificate shall include the Funded Senior Debt of the Person to
be acquired minus, the EBIDTA of the Person to be acquired, based
on the prior four (4) fiscal quarters. The Borrowers agree that
concurrently with the completion of any Acquisition which is
funded, in whole or in part, with the proceeds of any of the
Loans, upon request of the Lender, the Person so acquired will be
added as a co-obligor of the Facility 2 Loan and the Facility 3
Loan and as a party to the Financing Documents and all of the
assets acquired in connection with such Acquisition will be
pledged to secure the Facility 2 Loan and the Facility 3 Loan.
SECTION VIII.4 Advances and Loans. Lend money, give credit
or make advances to any Person, including, without limitation,
officers, directors, employees, and Affiliates of any of the
Borrowers in excess of $100,000, in the aggregate outstanding at
any time.
SECTION VIII.5 Contingent Liabilities. Assume, guarantee,
endorse, contingently agree to purchase or otherwise become
liable upon the obligation of any Person, except (a) by the
endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business, (b)
guaranties by any Borrower of contractual obligations (other than
for the payment of borrowed money) of any Wholly Owned Subsidiary
of any Borrower, or (c) guaranties in connection with any
Acquisition.
SECTION VIII.6 ERISA Compliance. None of the Borrowers nor
any Commonly Controlled Entity will: (a) engage in or permit any
"prohibited transaction" (as defined in ERISA); (b) cause any
"accumulated funding deficiency" as defined in ERISA and/or the
Internal Revenue Code; (c) terminate any pension plan in a manner
which could result in the imposition of a lien on the property of
the Borrowers pursuant to ERISA; (d) terminate or consent to the
termination of any Multiemployer Plan; or (e) incur a complete or
partial withdrawal with respect to any Multiemployer Plan.
SECTION VIII.7 Prohibition on Hazardous Materials. The
Borrowers shall not place, manufacture or store or permit to be
placed, manufactured or stored any Hazardous Materials on any
property owned, controlled or operated by the Borrowers or for
which the Borrowers are responsible, except for reasonable
quantities of necessary supplies for use by the Borrowers in the
ordinary course of the their current line of business and stored,
used and disposed in accordance with applicable Laws.
SECTION VIII.8 Transfer of Collateral. Transfer, or permit
the transfer, to another location of any of the Collateral (other
than titled motor vehicles in moved in the ordinary course of any
Borrowers business) or the books and records related to any of
the Collateral; provided, however, that the Borrowers may
transfer the Collateral or the books and records related thereto
to another location if (a) the Borrowers shall have provided to
the Lender prior to such transfer an opinion of counsel addressed
to the Lender to the effect that the Lender's perfected security
interest shall not be affected by such move or if it shall be
affected, setting forth the steps necessary to continue the
Lender's perfected security interest together with the
commencement of such steps by the Borrowers at their expense, and
(b) shall have taken such steps.
SECTION VIII.9 Sale of Accounts. Sell, discount, transfer,
assign or otherwise dispose of any of their Accounts, notes
receivable, installment or conditional sales agreements or any
other rights to receive income, revenues or moneys, however
evidenced.
SECTION VIII.10 Change in Senior Management. Change
the Senior Management of Arguss.
IX. EVENTS OF DEFAULT
The occurrence of one or more of the following events shall
be "Events of Default" under this Agreement, and the terms "Event
of Default" or "Default" shall mean, whenever they are used in
this Agreement, any one or more of the following events:
SECTION IX.1 Failure to Pay. The Borrowers shall fail to
(a) make any payment of principal or interest on any of the Notes
beyond any applicable grace, cure or notice period, or (b) pay
any of the Obligations, when and as the same shall become due and
payable.
SECTION IX.2 Breach of Representations and Warranties.
Any representation or warranty made herein or in any report,
certificate, opinion (including any opinion of counsel for the
Borrowers), financial statement or other instrument furnished in
connection with the Obligations or with the execution and
delivery of any of the Financing Documents, shall prove to have
been false or misleading when made in any material respect and
any such representation or warranty which, in the reasonable
opinion of the Lender, is capable of being cured is not cured to
the satisfaction of the Bank within ten (10) days after the date
of written notice thereof by the Lender to the Borrower.
SECTION IX.3 Failure to Comply with Insurance Provisions.
The Borrowers shall fail to duly and promptly perform, comply
with or observe the terms, covenants, conditions and agreements
set forth in SECTIONS 7.17 and 7.18.
SECTION IX.4 Failure to Comply with Covenants. Default
shall be made by the Borrowers in the due observance and perfor
xxxxx of any covenant, condition or agreement contained in
SECTION 7.02 hereof.
SECTION IX.5 Other Defaults. Default shall be made by the
Borrowers in the due observance or performance of any other term,
covenant or agreement herein contained, which default shall
remain unremedied for thirty (30) days after written notice
thereof to the Borrowers by the Lender.
SECTION IX.6 Default Under Other Financing Documents. An
event of default shall occur under any of the other Financing
Documents, and such event of default is not cured within any
applicable grace period provided therein.
SECTION IX.7 Receiver; Bankruptcy. Any of the Borrowers
shall (a) apply for or consent to the appointment of a receiver,
trustee or liquidator of itself or any of their property, (b)
admit in writing their inability to pay their debts as they
mature, (c) make a general assignment for the benefit of credi
tors, (d) be adjudicated a bankrupt or insolvent, (e) file a
voluntary petition in bankruptcy or a petition or an answer
seeking reorganization or an arrangement with creditors or to
take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute,
or an answer admitting the material allegations of a petition
filed against either of them in any proceeding under any such law
or if corporate action shall be taken by any of the Borrowers
for the purposes of effecting any of the foregoing, or (f) by any
act indicate either of their consent to, approval of or
acquiescence in any such proceeding or the appointment of any
receiver of or trustee for any of their property, or suffer any
such receivership, trusteeship or proceeding to continue
undischarged for a period of sixty (60) days.
SECTION IX.8 Judgment. Unless adequately insured in the
opinion of the Lender, the entry of a final judgment for the
payment of money involving more than $500,000 against the
Borrowers and the failure by the Borrowers to discharge the
same, or cause it to be discharged, within thirty (30) days from
the date of the order, decree or process under which or pursuant
to which such judgment was entered, or to secure a stay of
execution pending appeal of such judgment.
SECTION IX.9 Execution; Attachment. Any execution or
attachment shall be levied against any material part of the
Collateral and such execution or attachment shall not be set
aside, discharged or stayed within thirty (30) days after the
same shall have been levied.
SECTION IX.10 Default Under Other Borrowings. Default
shall be made with respect to any evidence of indebtedness or
liability for borrowed money in excess of $500,000 (other than
the Loans) if the effect of such default is to accelerate the
maturity of such evidence of indebtedness or liability or to
permit the holder or obligee thereof to cause any indebtedness to
become due prior to its stated maturity.
SECTION IX.11 Material Adverse Change. If the Lender in
its sole but reasonable discretion determines in good faith that
a material adverse change has occurred in the financial condition
of the Borrowers from the financial condition set forth in the
financial statements dated June 30, 1997 or from the financial
condition of the Borrowers most recently disclosed to the Lender
in any manner.
SECTION IX.12 Impairment of Position. If the Lender in its
sole discretion determines in good faith that an event has
occurred which impairs the prospect of payment of the Obligations
and/or the value of the Collateral.
SECTION IX.13 Change in Senior Management. Any change in
the Senior Management of Arguss.
X. RIGHTS AND REMEDIES UPON DEFAULT
SECTION X.1 Demand; Acceleration. The occurrence or non-
occurrence of an Event of Default under this Agreement shall in
no way affect or condition the right of the Lender to demand
payment at any time of any of the Obligations which are payable
on demand regardless of whether or not an Event of Default has
occurred. Upon the occurrence of an Event of Default, and in
every such event and at any time thereafter, the Lender may
declare the Obligations due and payable, without presentment,
demand, protest, or any notice of any kind, all of which are
hereby expressly waived, anything contained herein or in any of
the other Financing Documents to the contrary notwithstanding.
SECTION X.2 Specific Rights With Regard to Collateral.
In addition to all other rights and remedies provided hereunder
or as shall exist at law or in equity from time to time, the
Lender may upon the occurrence of an Event of Default, without
notice to the Borrowers:
(a) request any Account Debtor obligated on any of the
Accounts to make payments thereon directly to the Lender, with
the Lender taking control of the cash and non-cash proceeds
thereof;
(b) compromise, extend or renew any of the Collateral
or deal with the same as it may deem advisable;
(c) make exchanges, substitutions or surrenders of all
or any part of the Collateral;
(d) remove from any of the Borrowers' place of
business all books, records, ledger sheets, correspondence,
invoices and documents, relating to or evidencing any of the
Collateral or without cost or expense to the Lender, make such
use of the Borrowers' place(s) of business as may be reasonably
necessary to administer, control and collect the Collateral;
(e) repair, alter or supply goods if necessary to
fulfill in whole or in part the purchase order of any Account
Debtor;
(f) demand, collect, receipt for and give renewals,
extensions, discharges and releases of any of the Collateral;
(g) institute and prosecute legal and equitable
proceedings to enforce collection of, or realize upon, any of the
Collateral;
(h) settle, renew, extend, compromise, compound,
exchange or adjust claims in respect of any of the Collateral or
any legal proceedings brought in respect thereof;
(i) endorse the name of the Borrowers upon any items
of payment relating to the Collateral or on any proof of claim in
bankruptcy against an Account Debtor; and
(j) notify the post office authorities to change the
address for the delivery of mail to the Borrowers to such address
or post office box as the Lender may designate and receive and
open all mail addressed to the Borrowers.
SECTION X.3 Performance by Lender. If the Borrowers
shall fail to pay the Obligations or otherwise fail to perform,
observe or comply with any of the conditions, covenants, terms,
stipulations or agreements contained in this Agreement or any of
the other Financing Documents, the Lender without notice to or
demand upon the Borrowers and without waiving or releasing any of
the Obligations or any Event of Default, may (but shall be under
no obligation to) at any time thereafter make such payment or
perform such act for the account and at the expense of the
Borrowers, and may enter upon the premises of the Borrowers for
that purpose and take all such action thereon as the Lender may
consider necessary or appropriate for such purpose. All sums so
paid or advanced by the Lender and all costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) incurred in connection therewith (the "Expense
Payments") together with interest thereon from the date of
payment, advance or incurring until paid in full at the rate of
two percent (2%) per annum in excess of the highest fluctuating
interest rate payable under any of the Notes from time to time
shall be paid by the Borrowers to the Lender on demand and shall
constitute and become a part of the Obligations.
SECTION X.4 Uniform Commercial Code and Other Remedies.
Upon the occurrence of an Event of Default (and in addition to
all of its rights, powers and remedies under this Agreement), the
Lender shall have all of the rights and remedies of a secured
party under the Maryland Uniform Commercial Code and other
applicable laws, and the Lender is authorized to offset and apply
to all or any part of the Obligations all moneys, credits and
other property of any nature whatsoever of the Borrowers now or
at any time hereafter in the possession of, in transit to or
from, under the control or custody of, or on deposit with, the
Lender. Upon demand by the Lender, the Borrowers shall assemble
the Collateral and make it available to the Lender, at a place
designated by the Lender. The Lender or its agents may enter
upon the Borrowers' premises to take possession of the Collater
al, to remove it, to render it unusable, or to sell or otherwise
dispose of it.
Any written notice of the sale, disposition or other intend
ed action by the Lender with respect to the Collateral which is
sent by regular mail, postage prepaid, to the Borrowers at the
address set forth in Part XI hereof, or such other address of the
Borrowers which may from time to time be shown on the Lender's
records, at least ten (10) days prior to such sale, disposition
or other action, shall constitute reasonable notice to the
Borrowers. The Borrowers shall pay on demand all costs and
expenses, including, without limitation, attorney's fees and
expenses, incurred by or on behalf of the Lender in preparing for
sale or other disposition, selling, managing, collecting or
otherwise disposing of, the Collateral. All of such costs and
expenses (the "Liquidation Costs") together with interest thereon
from the date incurred until paid in full at the Default Rate,
shall be paid by the Borrowers to the Lender on demand and shall
constitute and become a part of the Obligations. Any proceeds of
sale or other disposition of the Collateral will be applied by
the Lender to the payment of the Liquidation Costs and Expense
Payments, and any balance of such proceeds will be applied by the
Lender to the payment of the balance of the Obligations in such
order and manner of application as the Lender may from time to
time in its sole discretion determine. After such application of
the proceeds, any balance shall be paid to the Borrowers or to
any other party entitled thereto.
XI. MISCELLANEOUS
SECTION XI.1 Notices. All notices, certificates or other
communications hereunder shall be deemed given when delivered by
hand or courier, or when mailed by certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to the Lender: NATIONSBANK, N.A.
Commercial Banking
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Broni
Assistant Vice President
if to the Borrowers: ARGUSS HOLDINGS, INC.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
Principal Financial Officer
SECTION XI.2 Consents and Approvals. If any consent,
approval, or authorization of any state, municipal or other
governmental department, agency or authority or of any person, or
any person, corporation, partnership or other entity having any
interest therein, should be necessary to effectuate any sale or
other disposition of the Collateral, the Borrowers agree to
execute all such applications and other instruments, and to take
all other action, as may be required in connection with securing
any such consent, approval or authorization.
SECTION XI.3 Remedies, etc. Cumulative. Each right, power
and remedy of the Lender as provided for in this Agreement or in
any of the other Financing Documents or now or hereafter existing
at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other
right, power or remedy provided for in this Agreement or in any
of the other Financing Documents or now or hereafter existing at
law or in equity, by statute or otherwise, and the exercise or
beginning of the exercise by the Lender of any one or more of
such rights, powers or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such
other rights, powers or remedies. In order to entitle the Lender
to exercise any remedy reserved to it herein, it shall not be
necessary to give any notice, other than such notice as may be
expressly required in this Agreement.
SECTION XI.4 No Waiver of Rights by the Lender. No
failure or delay by the Lender to insist upon the strict
performance of any term, condition, covenant or agreement of this
Agreement or of any of the other Financing Documents, or to
exercise any right, power or remedy consequent upon a breach
thereof, shall constitute a waiver of any such term, condition,
covenant or agreement or of any such breach or preclude the
Lender from exercising any such right, power or remedy at any
later time or times. By accepting payment after the due date of
any amount payable under this Agreement or under any of the other
Financing Documents, the Lender shall not be deemed to waive the
right either to require prompt payment when due of all other
amounts payable under this Agreement or under any of the other
Financing Documents, or to declare a default for failure to
effect such prompt payment of any such other amount.
SECTION XI.5 Entire Agreement. The Financing Documents
shall completely and fully supersede all other agreements, both
written and oral, between the Lender and the Borrowers relating
to the Obligations. Neither the Lender nor the Borrowers shall
hereafter have any rights under such prior agreements but shall
look solely to the Financing Documents for definition and
determination of all of their respective rights, liabilities and
responsibilities relating to the Obligations.
SECTION XI.6 Survival of Agreement; Successors and
Assigns. All covenants, agreements, representations and
warranties made by the Borrowers herein and in any certificate,
in the Financing Documents and in any other instruments or
documents delivered pursuant hereto shall survive the making by
the Lender of the Loans and the execution and delivery of the
Notes, and shall continue in full force and effect so long as any
of the Obligations are outstanding and unpaid. Whenever in this
Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns
of such party; and all covenants, promises and agreements by or
on behalf of the Borrowers, which are contained in this Agreement
shall inure to the benefit of the successors and assigns of the
Lender, and all covenants, promises and agreements by or on
behalf of the Lender which are contained in this Agreement shall
inure to the benefit of the permitted successors and permitted
assigns of the Borrowers, but this Agreement may not be assigned
by the Borrowers without the prior written consent of the Lender.
SECTION XI.7 Expenses. The Borrowers agree to pay all out-
of-pocket expenses of the Lender (including the reasonable fees
and expenses of its legal counsel) in connection with the prepara
tion of this Agreement, the recordation of all financing
statements and such other instruments as may be required by the
Lender at the time of, or subsequent to, the execution of this
Agreement to secure the Obligations (including any and all
recordation tax and other costs and taxes incident to recording),
the enforcement of any provision of this Agreement and the
collection of the Obligations. The Borrowers agree to indemnify
and save harmless the Lender for any liability resulting from the
failure to pay any required recordation tax, transfer taxes,
recording costs or any other expenses incurred by the Lender in
connection with the Obligations. The provisions of this Section
shall survive the execution and delivery of this Agreement and
the repayment of the Obligations. The Borrowers further agree to
reimburse the Lender upon demand for all out-of-pocket expenses
(including reasonable attorneys' fees and legal expenses) in
curred by the Lender in enforcing any of the Obligations or any
security therefor, which agreement shall survive the termination
of this Agreement and the repayment of the Obligations.
SECTION XI.8 Counterparts. This Agreement may be executed
in any number of counterparts all of which together shall consti
tute a single instrument.
SECTION XI.9 Governing Law. This Agreement and all of the
other Financing Documents shall be governed by, and construed in
accordance with the laws of the State of Maryland.
SECTION XI.10 Modifications. No modification or waiver of
any provision of this Agreement or of any of the other Financing
Documents, nor consent to any departure by the Borrowers there
from, shall in any event be effective unless the same shall be in
writing, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No
notice to or demand on the Borrowers in any case shall entitle
the Borrowers to any other or further notice or demand in the
same, similar or other circumstance.
SECTION XI.11 Illegality. If fulfillment of any provision
hereof or any transaction related hereto or to any of the other
Financing Documents, at the time performance of such provision
shall be due, shall involve transcending the limit of validity
prescribed by law, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if
any clause or provisions herein contained other than the
provisions hereof pertaining to repayment of the Obligations
operates or would prospectively operate to invalidate this
Agreement in whole or in part, then such clause or provision only
shall be void, as though not herein contained, and the remainder
of this Agreement shall remain operative and in full force and
effect; and if such provision pertains to repayment of the
Obligations, then, at the option of the Lender, all of the
Obligations of the Borrowers to the Lender shall become
immediately due and payable.
SECTION XI.12 Extension of Maturity. Should the principal
of or interest on the Notes become due and payable on other than
a Banking Day, the maturity thereof shall be extended to the next
succeeding Banking Day and in the case of principal, interest
shall be payable thereon at the rate per annum specified in the
Notes during such extension.
SECTION XI.13 Gender, etc. Whenever used herein, the singu
lar number shall include the plural, the plural the singular and
the use of the masculine, feminine or neuter gender shall include
all genders.
SECTION XI.14 Headings. The headings in this Agreement are
for convenience only and shall not limit or otherwise affect any
of the terms hereof.
SECTION XI.15 Waiver of Trial by Jury. The parties hereto
hereby waive trial by jury in any action or proceeding to which
both of them may be parties, arising out of or in any way
pertaining to (a) this Agreement, (b) the Loans, the Obligations,
and the Collateral which are the subject of this Agreement, and
(c) any and all notes, guarantees, assignments or agreements of
any kind relating to the Loans. It is agreed and understood that
this waiver constitutes a waiver of trial by jury of all claims
against all parties to such actions or proceedings, including
claims against parties who are not parties to this Agreement.
This waiver is knowingly, willingly and voluntarily
made by each of the parties hereto, and the parties hereby
represent that no representations of fact or opinion have been
made by any individual to induce this waiver of trial by jury or
to in any way modify or nullify its effect. The parties further
represent that they have been represented in the signing of this
Agreement and in the making of this waiver by independent legal
counsel, selected of their own free will, and that they have had
the opportunity to discuss this waiver with counsel.
SECTION XI.16 ARBITRATION. ANY CONTROVERSY OR CLAIM
BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO
THOSE ARISING OUT OF THIS NOTE OR ANY RELATED INSTRUMENTS,
AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING
FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION
IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE,
INC., D/B/A J.A.M.S./ENDISPUTE ("J.A.M.S.") AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF AN INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS NOTE
RELATES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
XXXXXXXXXX COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL
APPOINT AN ARBITRATOR. IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING
OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING
FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE SHALL BE
DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS
CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A
WAIVER BY THE LENDER OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III)
LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE SELF HELP
REMEDIES SUCH AS (BUT NOT LIMITED TO) SET OFF, OR (B) TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR
(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH
AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THE EXERCISE OF SELF
HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF ANY ACTION
FOR FORECLOSURE OR FOR PROVISIONAL OR ANCILLARY REMEDIES SHALL
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
CLAIMANT IN SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
SECTION XI.17 Liability of the Lender. The Borrowers
hereby agree that the Lender shall not be chargeable for any
negligence, mistake, act or omission of any accountant, examiner,
agency or attorney employed by the Lender (except for the willful
misconduct of any person, corporation, partnership or other
entity employed by the Lender) in making examinations, investiga
tions or collections, or otherwise in perfecting, maintaining,
protecting or realizing upon any lien or security interest or any
other interest in the Collateral or other security for the
Obligations.
SECTION XI.18 Right of Contribution. The Borrowers and the
Lender agree that on and after the date hereof, each Borrower (an
"Entitled Borrower") shall be entitled to contribution from each
other Borrower to the extent, if any, that (a) an Entitled
Borrower incurs any Obligations in excess of such Entitled
Borrower's Net Valuation (as hereinafter defined) or (b) the
Obligations incurred by such Entitled Borrower would leave such
Entitled Borrower with an unreasonably small amount of capital to
enable the Entitled Borrower to operate the business in which it
is engaged, and/or the Obligations incurred by such Entitled
Borrower prevents such Entitled Borrower from paying its debts as
such debts mature; provided, however, that such right of
contribution shall be subordinated to the payment of the
Obligations and may not be exercised by any Borrower until all of
the Obligations have been paid in full. Nothing in this Section
shall be deemed to in any manner impair the joint and several
liability of each Borrower for any and all of the Obligations.
The provisions of this Section shall be in addition to and shall
in no manner limit any other rights of contribution available to
any Borrower. The term "Net Valuation" as used in this Section
means the amount by which (1) an Entitled Borrower's property at
a fair valuation exceeds (2) such Entitled Borrower's debts.
IN WITNESS WHEREOF, the parties hereto have signed and
sealed this Agreement on the day and year first above written.
WITNESS OR ATTEST: ARGUSS HOLDINGS, INC.
__________________________
By:_______________________________(SEAL)
Xxxxxx X. Xxxxxx
Chief Financial Officer
WITNESS OR ATTEST: WHITE MOUNTAIN CABLE CONSTRUCTION
CORP.
__________________________
By:_______________________________(SEAL)
H. Xxxxxxx Xxxxxx, III
Vice President
WITNESS OR ATTEST: CONCEPTRONIC, INC.
__________________________
By:_______________________________(SEAL)
Xxxxxx X. Xxxxxx
Vice President
WITNESS: NATIONSBANK, N.A.
__________________________
By:_______________________________(SEAL)
Xxxx X. Broni
Assistant Vice President
SCHEDULES
5.01 Names of All Subsidiaries
SCHEDULE 5.01
Names of All Subsidiaries
Arguss Holdings, Inc.
White Mountain Cable Construction Corp.
Conceptonic, Inc.
Arguss Services Corp.
White Mountain Cable Construction Corp.
None
Conceptronic, Inc.
None
EXHIBITS
A-1. Facility 1 Note
A-2. Facility 2 Note
A-3 Facility 2 Term Note
A-4 Facility 3 Note
A-5 Facility 4 Note
B. Places of Business
D. Liens on Collateral
E. Borrowing Certificate
EXHIBIT B
PLACES OF BUSINESS
Arguss' Chief Executive Office is:
ARGUSS HOLDINGS, INC.
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Arguss has other places of business at the following addresses:
None
The Collateral is located at the following address:
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxx 0
Xxxxx, Xxx Xxxxxxxxx 00000
TCS Communications
00000 XX Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxx 00000
0 Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
White Mountain's Chief Executive Office is:
Xxxxx 0
Xxxxx, Xxx Xxxxxxxxx 00000
White Mountain has other places of business at the following
addresses:
TCS Communications
00000 XX Xxxxxxx 00 Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxx 00000
Conceptronic's Chief Executive Office is:
0 Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
Conceptronic has other places of business at the following addresses:
None
EXHIBIT C
LIENS ON COLLATERAL
REVOLVING PROMISSORY NOTE
$3,500,000.00
Rockville, Maryland
September 11, 1997
FOR VALUE RECEIVED, ARGUSS HOLDINGS, INC. a corporation
organized under the laws of the State of Delaware and WHITE
MOUNTAIN CABLE CONSTRUCTION CORP., a corporation organized under
the laws of the State of Delaware (collectively, the "Borrowers"
and each a "Borrower"), jointly and severally, promise to pay to
the order of NATIONSBANK, N.A., a national banking association,
its successors and assigns (the "Lender"), the principal sum of
THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($3,500,000.00) (the "Principal Sum"), or so much thereof as has
been or may be advanced and readvanced to or for the account of
the Borrowers pursuant to the terms and conditions of the
Financing Agreement (as hereinafter defined), together with
interest thereon at the rate or rates hereinafter provided, in
accordance with the following:
1. Interest. Commencing as of the date hereof and
continuing until repayment in full of all sums due hereunder, all
amounts outstanding hereunder shall bear interest at the LIBOR
Rate (as hereinafter defined), plus one hundred and sixty five
basis points (1.65%) rounded upward to the nearest basis point.
For purposes hereof, the "LIBOR Rate" shall mean a fluctuating
rate equal to the daily London Interbank Offered Rate for thirty
(30) days U.S. Dollar deposits as quoted by the Lender as of
11:00 A.M. (Washington, D.C., time), which rate shall be adjusted
for any Federal Reserve Board reserve requirements imposed upon
the Lender from time to time (the "LIBOR Rate"). The interest
rate on all sums accruing interest at the LIBOR Rate under this
Note shall change on the first day of each month, based on the
LIBOR Rate as of the last day of the immediately preceding month.
2. Payments and Maturity. The unpaid Principal Sum,
together with interest thereon at the rate or rates provided
above, shall be payable as follows:
(a) Interest on the unpaid Principal Sum shall be due
and payable monthly, commencing October 31, 1997, and on the last
day of each month thereafter to maturity; and
(b) Unless sooner paid, the unpaid Principal Sum,
together with interest accrued and unpaid thereon, shall be due
and payable in full on September 9, 2002.
The fact that the balance hereunder may be reduced to zero
from time to time pursuant to the Financing Agreement will not
affect the continuing validity of this Note or the Financing
Agreement, and the balance may be increased to the Principal Sum
after any such reduction to zero.
3. Conversion Period. Advances under this Note shall
from time to time be converted to one or more term loans pursuant
to Section 2.02(a) of the Financing Agreement. Amounts converted
to term loans and outstanding under such term loans shall reduce
the maximum principal amount available under this Note by an
equivalent amount.
4. Default Interest. Upon the occurrence of an Event of
Default (as hereinafter defined), the unpaid Principal Sum shall
bear interest thereafter at a rate two percent (2%) per annum in
excess of the then highest current rate or rates of interest
hereunder until such Event of Default is cured.
5. Late Charges. If the Borrowers shall fail to make any
payment under the terms of this Note within fifteen (15) days
after the date such payment is due, the Borrowers shall pay to
the Lender on demand a late charge equal to five percent (5%) of
such payment.
6. Application and Place of Payments. All payments, made
on account of this Note shall be applied first to the payment of
any late charge then due hereunder, second to the payment of
accrued and unpaid interest then due hereunder, and the
remainder, if any, shall be applied to the unpaid Principal Sum,
with application first made to all principal installments then
due hereunder, next to the outstanding principal balance due and
owing at maturity and thereafter to the principal payments due in
the inverse order of maturities. Notwithstanding any provision
contained herein to the contrary, any portion of a permitted
partial prepayment applied to the unpaid Principal Sum shall be
applied first to the outstanding principal balance due and owing
at maturity and thereafter to the principal payments due in the
inverse order of maturities. All payments on account of this
Note shall be paid in lawful money of the United States of
America in immediately available funds during regular business
hours of the Lender at its principal office in Bethesda, Maryland
or at such other times and places as the Lender may at any time
and from time to time designate in writing to the Borrowers. The
Lender is authorized to deduct any payment (including payments of
principal and/or interest as above provided) from the Borrowers'
Account Number _____________ on or after the date the payment is
due; provided, however, that such authorization shall not be
deemed to relieve the Borrowers from their joint and several
obligation to make such payment when it is due.
7. Financing Agreement and Other Financing Documents.
This Note is the "Facility 2 Note" described in a Financing and
Security Agreement of even date herewith by and among the
Borrowers, Conceptronic, Inc. ("Conceptronic") and the Lender (as
amended, modified, restated, substituted, extended and renewed at
any time and from time to time, the "Financing Agreement"). The
indebtedness evidenced by this Note is included within the
meaning of the term "Obligations" as defined in the Financing
Agreement. The term "Financing Documents" as used in this Note
shall mean collectively this Note, the Facility 1 Note, the
Facility 2 Term Notes, the Facility 3 Note, the Facility 4 Note,
the Financing Agreement and any other instrument, agreement, or
document previously, simultaneously, or hereafter executed and
delivered by the Borrowers, Conceptronic and/or any other person,
singularly or jointly with any other person, evidencing,
securing, guaranteeing, or in connection with the Principal Sum,
this Note, the Facility 1 Note, the Facility 2 Term Notes, the
Facility 3 Note, the Facility 4 Note and/or the Financing
Agreement. All capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the
Financing Agreement.
8. Prepayment. During any Conversion Period, the
Borrowers may prepay the Principal Sum in whole or in part, at
any time or from time to time, without premium or penalty. Any
prepayment made not within any Conversion Period, in whole or in
part, will not affect the Borrowers' joint and several obligation
to continue making payment in connection with any swap agreement
(as defined in 11 U.S.C. 101), which will remain in full force
and effect notwithstanding that prepayment.
9. Security. This Note is secured as provided in the
Financing Agreement.
10. Events of Default. The occurrence of any one or more
of the following events shall constitute an event of default
(individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender
when due, after all applicable grace periods, if any, any and all
amounts payable by the Borrowers to the Lender under the terms of
this Note; or
(b) The occurrence of an event of default (as defined
therein) under the terms and conditions of any of the other
Financing Documents.
11. Remedies. Upon the occurrence of an Event of Default,
at the option of the Lender, all amounts payable by the Borrowers
to the Lender under the terms of this Note shall immediately
become due and payable by the Borrowers to the Lender without
notice to the Borrowers or any other person, and the Lender shall
have all of the rights, powers, and remedies available under the
terms of this Note, any of the other Financing Documents and all
applicable laws. The Borrowers and all endorsers, guarantors,
and other parties who may now or in the future be primarily or
secondarily liable for the payment of the indebtedness evidenced
by this Note hereby severally waive presentment, protest and
demand, notice of protest, notice of demand and of dishonor and
non-payment of this Note and expressly agree that this Note or
any payment hereunder may be extended from time to time without
in any way affecting the liability of the Borrowers, guarantors
and endorsers.
Until such time as the Lender is not committed to extend
further credit to the Borrowers and all Obligations of the
Borrowers to the Lender have been indefeasibly paid in full in
cash, and subject to and not in limitation of the provisions set
forth in the next following paragraph below, the Borrowers shall
not have any right of subrogation (whether contractual, arising
under the Bankruptcy Code or otherwise), reimbursement or
contribution from any of the Borrowers or any guarantor, nor any
right of recourse to its security for any of the debts and
obligations of any of the Borrowers which are the subject of this
Note. Except as otherwise expressly permitted by the Financing
Agreement, any and all present and future debts and obligations
of any of the Borrowers to either of the Borrowers are hereby
subordinated to the full payment and performance of all present
and future debts and obligations to the Lender under this Note
and the Financing Agreement and the Financing Documents,
provided, however, notwithstanding anything set forth in this
Note to the contrary, prior to the occurrence of a payment
Default, the Borrowers shall be permitted to make payments on
account of any of such present and future debts and obligations
from time to time in accordance with the terms thereof.
Each of the Borrowers further agree that, if any payment
made by either of the Borrowers or any other person is applied to
this Note and is at any time annulled, set aside, rescinded,
invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of
any property hereafter securing this Note is required to be
returned by the Lender to either of the Borrowers, its estate,
trustee, receiver or any other party, including, without
limitation, such Borrower, under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent
of such payment or repayment, such Borrower's liability hereunder
(and any lien, security interest or other collateral securing
such liability) shall be and remain in full force and effect, as
fully as if such payment had never been made, or, if prior
thereto any such lien, security interest or other collateral
hereafter securing such Borrower's liability hereunder shall have
been released or terminated by virtue of such cancellation or
surrender, this Note (and such lien, security interest or other
collateral) shall be reinstated in full force and effect, and
such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of such
Borrower in respect of the amount of such payment (or any lien,
security interest or other collateral securing such obligation).
The JOINT AND SEVERAL obligations of each Borrower under
this Note shall be absolute, irrevocable and unconditional and
shall remain in full force and effect until the outstanding
principal of and interest on this Note and all other Obligations
or amounts due hereunder and under the Financing Agreement and
the Financing Documents shall have been indefeasibly paid in full
in cash in accordance with the terms thereof and this Note shall
have been canceled.
12. Expenses. The Borrowers, jointly and severally,
promise to pay to the Lender on demand by the Lender all costs
and expenses incurred by the Lender in connection with the
collection and enforcement of this Note, including, without
limitation, reasonable attorneys' fees and expenses and all court
costs.
13. Notices. Any notice, request, or demand to or upon the
Borrowers or the Lender shall be deemed to have been properly
given or made when delivered in accordance with Section 11.01 of
the Financing Agreement.
14. Miscellaneous. Each right, power, and remedy of the
Lender as provided for in this Note or any of the other Financing
Documents, or now or hereafter existing under any applicable law
or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in
this Note or any of the other Financing Documents or now or
hereafter existing under any applicable law, and the exercise or
beginning of the exercise by the Lender of any one or more of
such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such
other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term,
condition, covenant, or agreement of this Note or any of the
other Financing Documents, or to exercise any right, power, or
remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant, or agreement or of
any such breach, or preclude the Lender from exercising any such
right, power, or remedy at a later time or times. By accepting
payment after the due date of any amount payable under the terms
of this Note, the Lender shall not be deemed to waive the right
either to require prompt payment when due of all other amounts
payable under the terms of this Note or to declare an Event of
Default for the failure to effect such prompt payment of any such
other amount. No course of dealing or conduct shall be effective
to amend, modify, waive, release, or change any provisions of
this Note.
15. Partial Invalidity. In the event any provision of this
Note (or any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the
affected provision) of this Note; but this Note shall be
construed as if such invalid, illegal, or unenforceable provision
(or part thereof) had not been contained in this Note, but only
to the extent it is invalid, illegal, or unenforceable.
16. Captions. The captions herein set forth are for
convenience only and shall not be deemed to define, limit, or
describe the scope or intent of this Note.
17. Applicable Law. Each of the Borrowers acknowledges and
agrees that this Note shall be governed by the laws of the State
of Maryland, even though for the convenience and at the request
of the Borrowers, this Note may be executed elsewhere.
18. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR
AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE
ARISING OUT OF THIS NOTE OR ANY RELATED INSTRUMENTS, AGREEMENTS
OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN
ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLIC
ABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE,
INC., D/B/A J.A.M.S./ENDISPUTE ("J.A.M.S.") AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF AN INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS INSTRUMENT,
AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED
IN XXXXXXXXXX COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO
WILL APPOINT AN ARBITRATOR. IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING
OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING
FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS
INSTRUMENT, NOTE SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY
OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND
ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE
LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF
THE LENDER: (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVI
SIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
19. Consent to Jurisdiction. Each of the Borrowers
irrevocably submits to the jurisdiction of any state or federal
court sitting in the State of Maryland over any suit, action, or
proceeding arising out of or relating to this Note. Each of the
Borrowers irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought
in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an
inconvenient forum. Final judgment in any such suit, action, or
proceeding brought in any such court shall be conclusive and
binding upon the Borrowers and may be enforced in any court in
which the Borrowers are subject to jurisdiction by a suit upon
such judgment provided that service of process is effected upon
the Borrowers as provided in this Note or as otherwise permitted
by applicable law.
20. WAIVER OF TRIAL BY JURY. EACH OF THE BORROWERS HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWERS, OR EITHER OF THEM, AND THE LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B)
THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY
THE BORROWERS, AND THE BORROWERS HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER
REPRESENT THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS
NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
IN WITNESS WHEREOF, the Borrowers have caused this Note to
be executed under seal by their duly authorized officers as of
the date first written above.
WITNESS/ATTEST: ARGUSS HOLDINGS, INC.
______________________________
By:______________________________(SEAL)
Xxxxxx X. Xxxxxx
Chief Financial Officer
WITNESS/ATTEST: WHITE MOUNTAIN CONSTRUCTION
CABLE CORP.
______________________________
By:______________________________(SEAL)
H. Xxxxxxx Xxxxxx, III
Vice President
REVOLVING PROMISSORY NOTE
$1,500,000.00 Rockville, Maryland
September 11, 1997
FOR VALUE RECEIVED, ARGUSS HOLDINGS, INC., a corporation
organized under the laws of the State of Delaware and
CONCEPTRONIC, INC., a corporation organized under the laws of the
State of Delaware (collectively, the "Borrowers" and each a
"Borrower"), jointly and severally, promise to pay to the order
of NATIONSBANK, N.A., a national banking association, its
successors and assigns (the "Lender"), the principal sum of ONE
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00)
(the "Principal Sum"), or so much thereof as has been or may be
advanced or readvanced to or for the account of the Borrowers
pursuant to the terms and conditions of the Financing Agreement
(as hereinafter defined), together with interest thereon at the
rate or rates hereinafter provided, in accordance with the
following:
1. Interest. Commencing as of the date hereof and
continuing until repayment in full of all sums due hereunder, the
unpaid Principal Sum shall bear interest at the fluctuating prime
rate of interest established and declared by the Lender from time
to time (the "Prime Rate"). The Prime Rate does not necessarily
represent the lowest rate of interest charged by the Lender to
borrowers. The rate of interest charged under this Note shall
change immediately and contemporaneously with any change in the
Prime Rate. All interest payable under the terms of this Note
shall be calculated on the basis of a 360-day year and the actual
number of days elapsed.
2. Payments and Maturity. The unpaid Principal Sum,
together with interest thereon at the rate or rates provided
above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be
due and payable monthly, commencing October 31, 1997, and on the
last day of each month thereafter to maturity; and
(b) Unless sooner paid, the unpaid Principal Sum,
together with interest accrued and unpaid thereon, shall be due
and payable in full on May 31, 1998.
The fact that the balance hereunder may be reduced to zero
from time to time pursuant to the Financing Agreement will not
affect the continuing validity of this Note or the Financing
Agreement, and the balance may be increased to the Principal Sum
after any such reduction to zero.
3. Default Interest. Upon the occurrence and during the
continuance of an Event of Default (as hereinafter defined), the
unpaid Principal Sum shall bear interest thereafter at a rate two
percent (2%) per annum in excess of the then current rate or
rates of interest hereunder until such Event of Default is cured.
4. Late Charges. If the Borrowers shall fail to make any
payment under the terms of this Note within fifteen (15) days
after the date such payment is due, the Borrowers shall pay to
the Lender on demand a late charge equal to five percent (5%) of
such payment.
5. Application and Place of Payments. All payments, made
on account of this Note shall be applied first to the payment of
any late charge then due hereunder, second to the payment of
accrued and unpaid interest then due hereunder, and the
remainder, if any, shall be applied to the unpaid Principal Sum.
All payments on account of this Note shall be paid in lawful
money of the United States of America in immediately available
funds during regular business hours of the Lender at its
principal office in Bethesda, Maryland or at such other times and
places as the Lender may at any time and from time to time
designate in writing to the Borrowers. The Lender is authorized
to deduct any payment (including payments of principal and/or
interest as above provided) from the Borrowers' Account Number
______________ on or after the date the payment is due; provided,
however, that such authorization shall not be deemed to relieve
the Borrowers from their joint and several obligation to make
such payment when it is due.
6. Financing Agreement and Other Financing Documents.
This Note is the "Facility 4 Note" described in a Financing and
Security Agreement of even date herewith by and among the
Borrowers, Mountain Cable Construction Corp. ("Mountain Cable")
and the Lender (as amended, modified, restated, substituted,
extended and renewed at any time and from time to time, the
"Financing Agreement"). The indebtedness evidenced by this Note
is included within the meaning of the term "Obligations" as
defined in the Financing Agreement. The term "Financing
Documents" as used in this Note shall mean collectively this
Note, the Facility 1 Note, the Facility 2 Note, the Facility 2
Term Notes, the Facility 3 Note, the Financing Agreement and any
other instrument, agreement, or document previously,
simultaneously, or hereafter executed and delivered by the
Borrowers, Mountain Cable and/or any other person, singularly or
jointly with any other person, evidencing, securing,
guaranteeing, or in connection with the Principal Sum, this Note,
the Facility 1 Note, the Facility 2 Note, the Facility 2 Term
Notes, the Facility 3 Note and/or the Financing Agreement. All
capitalized terms used herein and not otherwise defined shall
have the meanings given to such terms in the Financing Agreement.
7. Security. This Note is secured as provided in the
Financing Agreement.
8. Events of Default. The occurrence of any one or more
of the following events shall constitute an event of default
(individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender
when due any after all applicable grace periods, if any and all
amounts payable by the Borrowers to the Lender under the terms of
this Note; or
(b) The occurrence of an event of default (as defined
therein) under the terms and conditions of any of the other
Financing Documents.
9. Remedies. Upon the occurrence of an Event of Default,
at the option of the Lender, all amounts payable by the Borrowers
to the Lender under the terms of this Note shall immediately
become due and payable by the Borrowers to the Lender without
notice to the Borrowers or any other person, and the Lender shall
have all of the rights, powers, and remedies available under the
terms of this Note, any of the other Financing Documents and all
applicable laws. The Borrowers and all endorsers, guarantors,
and other parties who may now or in the future be primarily or
secondarily liable for the payment of the indebtedness evidenced
by this Note hereby severally waive presentment, protest and
demand, notice of protest, notice of demand and of dishonor and
non-payment of this Note and expressly agree that this Note or
any payment hereunder may be extended from time to time without
in any way affecting the liability of the Borrowers, guarantors
and endorsers.
Until such time as the Lender is not committed to extend
further credit to the Borrowers and all Obligations of the
Borrowers to the Lender have been indefeasibly paid in full in
cash, and subject to and not in limitation of the provisions set
forth in the next following paragraph below, no Borrower shall
have any right of subrogation (whether contractual, arising under
the Bankruptcy Code or otherwise), reimbursement or contribution
from any Borrower or any guarantor, nor any right of recourse to
its security for any of the debts and obligations of any Borrower
which are the subject of this Note. Except as otherwise
expressly permitted by the Financing Agreement, any and all
present and future debts and obligations of any Borrower to any
other Borrower are hereby subordinated to the full payment and
performance of all present and future debts and obligations to
the Lender under this Note and the Financing Agreement and the
Financing Documents, provided, however, notwithstanding anything
set forth in this Note to the contrary, prior to the occurrence
of a payment Default, the Borrowers shall be permitted to make
payments on account of any of such present and future debts and
obligations from time to time in accordance with the terms
thereof.
Each Borrower further agrees that, if any payment made by
any Borrower or any other person is applied to this Note and is
at any time annulled, set aside, rescinded, invalidated, declared
to be fraudulent or preferential or otherwise required to be
refunded or repaid, or the proceeds of any property hereafter
securing this Note is required to be returned by the Lender to
any Borrower, its estate, trustee, receiver or any other party,
including, without limitation, such Borrower, under any
bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, such
Borrower's liability hereunder (and any lien, security interest
or other collateral securing such liability) shall be and remain
in full force and effect, as fully as if such payment had never
been made, or, if prior thereto any such lien, security interest
or other collateral hereafter securing such Borrower's liability
hereunder shall have been released or terminated by virtue of
such cancellation or surrender, this Note (and such lien,
security interest or other collateral) shall be reinstated in
full force and effect, and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise
affect the obligations of such Borrower in respect of the amount
of such payment (or any lien, security interest or other
collateral securing such obligation).
The JOINT AND SEVERAL obligations of each Borrower under
this Note shall be absolute, irrevocable and unconditional and
shall remain in full force and effect until the outstanding
principal of and interest on this Note and all other Obligations
or amounts due hereunder and under the Financing Agreement and
the Financing Documents shall have been indefeasibly paid in full
in cash in accordance with the terms thereof and this Note shall
have been canceled.
10. Expenses. The Borrowers, jointly and severally,
promise to pay to the Lender on demand by the Lender all costs
and expenses incurred by the Lender in connection with the
collection and enforcement of this Note, including, without
limitation, reasonable attorneys' fees and expenses and all court
costs.
11. Notices. Any notice, request, or demand to or upon the
Borrowers or the Lender shall be deemed to have been properly
given or made when delivered in accordance with Section 11.01 of
the Financing Agreement.
12. Miscellaneous. Each right, power, and remedy of the
Lender as provided for in this Note or any of the other Financing
Documents, or now or hereafter existing under any applicable law
or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in
this Note or any of the other Financing Documents or now or
hereafter existing under any applicable law, and the exercise or
beginning of the exercise by the Lender of any one or more of
such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such
other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term,
condition, covenant, or agreement of this Note or any of the
other Financing Documents, or to exercise any right, power, or
remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant, or agreement or of
any such breach, or preclude the Lender from exercising any such
right, power, or remedy at a later time or times. By accepting
payment after the due date of any amount payable under the terms
of this Note, the Lender shall not be deemed to waive the right
either to require prompt payment when due of all other amounts
payable under the terms of this Note or to declare an Event of
Default for the failure to effect such prompt payment of any such
other amount. No course of dealing or conduct shall be effective
to amend, modify, waive, release, or change any provisions of
this Note.
13. Partial Invalidity. In the event any provision of this
Note (or any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the
affected provision) of this Note; but this Note shall be
construed as if such invalid, illegal, or unenforceable provision
(or part thereof) had not been contained in this Note, but only
to the extent it is invalid, illegal, or unenforceable.
14. Captions. The captions herein set forth are for
convenience only and shall not be deemed to define, limit, or
describe the scope or intent of this Note.
15. Applicable Law. Each of the Borrowers acknowledges and
agrees that this Note shall be governed by the laws of the State
of Maryland even though for the convenience and at the request of
the Borrowers, this Note may be executed elsewhere.
16. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG
THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT
OF THIS NOTE OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT,
SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE
FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE
STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR ARBITRATION
OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A
J.A.M.S./ENDISPUTE ("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH
BELOW. IN THE EVENT OF AN INCONSISTENCY, THE SPECIAL RULES SHALL
CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT,
AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY
OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY
OR CLAIM TO WHICH THIS INSTRUMENT, AGREEMENT OR DOCUMENT RELATES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
XXXXXXXXXX COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL
APPOINT AN ARBITRATOR. IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING
OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING
FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT,
NOTE SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY
WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE LENDER
OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF
THE BANK: (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVI
SIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
17. Consent to Jurisdiction. Each of the Borrowers
irrevocably submits to the jurisdiction of any state or federal
court sitting in the State of Maryland over any suit, action, or
proceeding arising out of or relating to this Note. Each of the
Borrowers irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought
in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an
inconvenient forum. Final judgment in any such suit, action, or
proceeding brought in any such court shall be conclusive and
binding upon the Borrowers and may be enforced in any court in
which the Borrowers are subject to jurisdiction by a suit upon
such judgment provided that service of process is effected upon
the Borrowers as provided in this Note or as otherwise permitted
by applicable law.
18. WAIVER OF TRIAL BY JURY. EACH OF THE BORROWERS HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWERS, OR EITHER OF THEM, AND THE LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B)
THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY
THE BORROWERS, AND THE BORROWERS HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER
REPRESENT THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS
NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
IN WITNESS WHEREOF, the Borrowers have caused this Note to
be executed under seal by their duly authorized officers as of
the date first written above.
WITNESS/ATTEST: ARGUSS HOLDINGS, INC.
______________________________
By:__________________________(SEAL)
Xxxxxx X. Xxxxxx
Chief Financial Officer
WITNESS/ATTEST: CONCEPTRONIC, INC.
______________________________
By:__________________________(SEAL)
Xxxxxx X. Xxxxxx
Vice President
REVOLVING PROMISSORY NOTE
$3,000,000.00 Rockville, Maryland
September 11, 1997
FOR VALUE RECEIVED, ARGUSS HOLDINGS, INC. a corporation
organized under the laws of the State of Delaware and WHITE
MOUNTAIN CABLE CONSTRUCTION CORP., a corporation organized under
the laws of the State of Delaware (collectively, the "Borrowers"
and each a "Borrower"), jointly and severally, promise to pay to
the order of NATIONSBANK, N.A., a national banking association,
its successors and assigns (the "Lender"), the principal sum of
THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) (the "Principal
Sum"), or so much thereof as has been or may be advanced and
readvanced to or for the account of the Borrowers pursuant to the
terms and conditions of the Financing Agreement (as hereinafter
defined), together with interest thereon at the rate or rates
hereinafter provided, in accordance with the following:
1. Interest. Commencing as of the date hereof and
continuing until repayment in full of all sums due hereunder, all
amounts outstanding hereunder shall bear interest at the LIBOR
Rate (as hereinafter defined), plus one hundred and sixty five
basis points (1.65%) rounded upwards to the nearest basis point.
For purposes hereof, the "LIBOR Rate" shall mean a fluctuating
rate equal to the daily London Interbank Offered Rate for thirty
(30) day U.S. Dollar deposits as quoted by the Lender as of 11:00
A.M. (Washington, D.C., time), which rate shall be adjusted for
any Federal Reserve Board reserve requirements imposed upon the
Lender from time to time (the "LIBOR Rate"). The interest rate
on all sums accruing interest at the LIBOR Rate under this Note
shall change on the first day of each month, based on the LIBOR
Rate as in effect on the last day of the immediately preceding
month. All interest payable under the terms of this Note shall
be calculated on the basis of a 360-day year and the actual
number of days elapsed.
2. Payments and Maturity. The unpaid Principal Sum,
together with interest thereon at the rate or rates provided
above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be
due and payable monthly, commencing October 31, 1997, and on the
last day of each month thereafter to maturity; and
(b) Unless sooner paid, the unpaid Principal Sum,
together with interest accrued and unpaid thereon, shall be due
and payable in full on May 31, 1998.
The fact that the balance hereunder may be reduced to zero
from time to time pursuant to the Financing Agreement will not
affect the continuing validity of this Note or the Financing
Agreement, and the balance may be increased to the Principal Sum
after any such reduction to zero.
3. Default Interest. Upon the occurrence of an Event of
Default (as hereinafter defined), the unpaid Principal Sum shall
bear interest thereafter at a rate two percent (2%) per annum in
excess of the then current rate or rates of interest hereunder
until such Event of Default is cured.
4. Late Charges. If the Borrowers shall fail to make any
payment under the terms of this Note within fifteen (15) days
after the date such payment is due, the Borrowers shall pay to
the Lender on demand a late charge equal to five percent (5%) of
such payment.
5. Application and Place of Payments. All payments, made
on account of this Note shall be applied first to the payment of
any late charge then due hereunder, second to the payment of
accrued and unpaid interest then due hereunder, and the
remainder, if any, shall be applied to the unpaid Principal Sum.
All payments on account of this Note shall be paid in lawful
money of the United States of America in immediately available
funds during regular business hours of the Lender at its
principal office in Bethesda, Maryland or at such other times and
places as the Lender may at any time and from time to time
designate in writing to the Borrowers. The Lender is authorized
to deduct any payment (including payments of principal and/or
interest as above provided) from the Borrowers' Account Number
______________ on or after the date the payment is due; provided,
however, that such authorization shall not be deemed to relieve
the Borrowers from their joint and several obligation to make
such payment when it is due.
6. Prepayment. The Borrowers may prepay the Principal
Sum in whole or in part, at any time or from time to time,
without premium or penalty. Any prepayment, in whole or in part,
will not affect the Borrowers' joint and several obligation to
continue making payment in connection with any swap agreement (as
defined in 11 U.S.C. 101), which will remain in full force and
effect notwithstanding that prepayment.
7. Financing Agreement and Other Financing Documents.
This Note is the "Facility 3 Note" described in a Financing and
Security Agreement of even date herewith by and among the
Borrowers, Conceptronic, Inc. ("Conceptronic") and the Lender (as
amended, modified, restated, substituted, extended and renewed at
any time and from time to time, the "Financing Agreement"). The
indebtedness evidenced by this Note is included within the
meaning of the term "Obligations" as defined in the Financing
Agreement. The term "Financing Documents" as used in this Note
shall mean collectively this Note, the Facility 1 Note, the
Facility 2 Note, the Facility 2 Term Notes, the Facility 4 Note,
the Financing Agreement and any other instrument, agreement, or
document previously, simultaneously, or hereafter executed and
delivered by the Borrowers, Conceptronic and/or any other person,
singularly or jointly with any other person, evidencing,
securing, guaranteeing, or in connection with the Principal Sum,
this Note, the Facility 1 Note, the Facility 2 Note, the Facility
2 Term Notes, the Facility 4 Note and/or the Financing
Agreement. All capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the
Financing Agreement.
8. Security. This Note is secured as provided in the
Financing Agreement.
9. Events of Default. The occurrence of any one or more
of the following events shall constitute an event of default
(individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender
when due, after all applicable grace periods, if any, and all
amounts payable by the Borrowers to the Lender under the terms of
this Note; or
(b) The occurrence of an event of default (as defined
therein) under the terms and conditions of any of the other
Financing Documents.
10. Remedies. Upon the occurrence of an Event of Default,
at the option of the Lender, all amounts payable by the Borrowers
to the Lender under the terms of this Note shall immediately
become due and payable by the Borrowers to the Lender without
notice to the Borrowers or any other person, and the Lender shall
have all of the rights, powers, and remedies available under the
terms of this Note, any of the other Financing Documents and all
applicable laws. The Borrowers and all endorsers, guarantors,
and other parties who may now or in the future be primarily or
secondarily liable for the payment of the indebtedness evidenced
by this Note hereby severally waive presentment, protest and
demand, notice of protest, notice of demand and of dishonor and
non-payment of this Note and expressly agree that this Note or
any payment hereunder may be extended from time to time without
in any way affecting the liability of the Borrowers, guarantors
and endorsers.
Until such time as the Lender is not committed to extend
further credit to the Borrowers and all Obligations of the
Borrowers to the Lender have been indefeasibly paid in full in
cash, and subject to and not in limitation of the provisions set
forth in the next following paragraph below, none of the
Borrowers shall have any right of subrogation (whether
contractual, arising under the Bankruptcy Code or otherwise),
reimbursement or contribution from any of the Borrowers or any
guarantor, nor any right of recourse to its security for any of
the debts and obligations of any of the Borrowers which are the
subject of this Note. Except as otherwise expressly permitted by
the Financing Agreement, any and all present and future debts and
obligations of any of the Borrowers to either of the Borrowers
are hereby subordinated to the full payment and performance of
all present and future debts and obligations to the Lender under
this Note and the Financing Agreement and the Financing
Documents, provided, however, notwithstanding anything set forth
in this Note to the contrary, prior to the occurrence of a
payment Default, the Borrowers shall be permitted to make
payments on account of any of such present and future debts and
obligations from time to time in accordance with the terms
thereof.
Each of the Borrowers further agree that, if any payment
made by either of the Borrowers or any other person is applied to
this Note and is at any time annulled, set aside, rescinded,
invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of
any property hereafter securing this Note is required to be
returned by the Lender to either of the Borrowers, its estate,
trustee, receiver or any other party, including, without
limitation, such Borrower, under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent
of such payment or repayment, such Borrower's liability hereunder
(and any lien, security interest or other collateral securing
such liability) shall be and remain in full force and effect, as
fully as if such payment had never been made, or, if prior
thereto any such lien, security interest or other collateral
hereafter securing such Borrower's liability hereunder shall have
been released or terminated by virtue of such cancellation or
surrender, this Note (and such lien, security interest or other
collateral) shall be reinstated in full force and effect, and
such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of such
Borrower in respect of the amount of such payment (or any lien,
security interest or other collateral securing such obligation).
The JOINT AND SEVERAL obligations of each of the Borrowers
under this Note shall be absolute, irrevocable and unconditional
and shall remain in full force and effect until the outstanding
principal of and interest on this Note and all other Obligations
or amounts due hereunder and under the Financing Agreement and
the Financing Documents shall have been indefeasibly paid in full
in cash in accordance with the terms thereof and this Note shall
have been canceled.
11. Expenses. The Borrowers, jointly and severally,
promise to pay to the Lender on demand by the Lender all costs
and expenses incurred by the Lender in connection with the
collection and enforcement of this Note, including, without
limitation, reasonable attorneys' fees and expenses and all court
costs.
12. Notices. Any notice, request, or demand to or upon the
Borrowers or the Lender shall be deemed to have been properly
given or made when delivered in accordance with Section 11.01 of
the Financing Agreement.
13. Miscellaneous. Each right, power, and remedy of the
Lender as provided for in this Note or any of the other Financing
Documents, or now or hereafter existing under any applicable law
or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in
this Note or any of the other Financing Documents or now or
hereafter existing under any applicable law, and the exercise or
beginning of the exercise by the Lender of any one or more of
such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such
other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term,
condition, covenant, or agreement of this Note or any of the
other Financing Documents, or to exercise any right, power, or
remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant, or agreement or of
any such breach, or preclude the Lender from exercising any such
right, power, or remedy at a later time or times. By accepting
payment after the due date of any amount payable under the terms
of this Note, the Lender shall not be deemed to waive the right
either to require prompt payment when due of all other amounts
payable under the terms of this Note or to declare an Event of
Default for the failure to effect such prompt payment of any such
other amount. No course of dealing or conduct shall be effective
to amend, modify, waive, release, or change any provisions of
this Note.
14. Partial Invalidity. In the event any provision of this
Note (or any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the
affected provision) of this Note; but this Note shall be
construed as if such invalid, illegal, or unenforceable provision
(or part thereof) had not been contained in this Note, but only
to the extent it is invalid, illegal, or unenforceable.
15. Captions. The captions herein set forth are for
convenience only and shall not be deemed to define, limit, or
describe the scope or intent of this Note.
16. Applicable Law. Each of the Borrowers acknowledges and
agrees that this Note shall be governed by the laws of the State
of Maryland, even though for the convenience and at the request
of the Borrowers, this Note may be executed elsewhere.
17. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR
AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE
ARISING OUT OF THIS NOTE OR ANY RELATED INSTRUMENTS, AGREEMENTS
OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN
ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLIC
ABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE,
INC., D/B/A J.A.M.S./ENDISPUTE ("J.A.M.S.") AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF AN INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS INSTRUMENT,
AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED
IN XXXXXXXXXX COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO
WILL APPOINT AN ARBITRATOR. IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING
OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING
FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS
INSTRUMENT, NOTE SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY
OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND
ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE
LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF
THE LENDER: (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVI
SIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
18. Consent to Jurisdiction. Each of the Borrowers
irrevocably submits to the jurisdiction of any state or federal
court sitting in the State of Maryland over any suit, action, or
proceeding arising out of or relating to this Note. Each of the
Borrowers irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought
in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an
inconvenient forum. Final judgment in any such suit, action, or
proceeding brought in any such court shall be conclusive and
binding upon the Borrowers and may be enforced in any court in
which the Borrowers are subject to jurisdiction by a suit upon
such judgment provided that service of process is effected upon
the Borrowers as provided in this Note or as otherwise permitted
by applicable law.
19. WAIVER OF TRIAL BY JURY. EACH OF THE BORROWERS HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWERS, OR EITHER OF THEM, AND THE LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B)
THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY
THE BORROWERS, AND THE BORROWERS HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER
REPRESENT THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS
NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
IN WITNESS WHEREOF, the Borrowers have caused this Note to
be executed under seal by their duly authorized officers as of
the date first written above.
WITNESS/ATTEST: ARGUSS HOLDINGS, INC.
______________________________
By:______________________________(SEAL)
Xxxxxx X. Xxxxxx
Chief Financial Officer
WITNESS/ATTEST: WHITE MOUNTAIN CONSTRUCTION
CABLE CORP.
______________________________
By:______________________________(SEAL)
H. Xxxxxxx Xxxxxx, III
Vice President
TERM PROMISSORY NOTE
$4,000,000.00
Rockville, Maryland
September 11, 1997
FOR VALUE RECEIVED, ARGUSS HOLDINGS, INC. a corporation
organized under the laws of the State of Delaware and WHITE
MOUNTAIN CABLE CONSTRUCTION CORP., a corporation organized under
the laws of the State of Delaware (collectively, the "Borrowers"
and each a "Borrower"), jointly and severally, promise to pay to
the order of NATIONSBANK, N.A., a national banking association,
its successors and assigns (the "Lender"), the principal sum of
FOUR MILLION AND NO/100 DOLLARS ($4,000,000.00) (the "Principal
Sum"), together with interest thereon at the rate or rates
hereinafter provided, in accordance with the following:
1. Interest. Commencing as of the date hereof and
continuing until repayment in full of all sums due hereunder, all
amounts outstanding hereunder shall bear interest at the LIBOR
Rate (as hereinafter defined), plus one hundred and seventy five
basis points (1.75%) rounded upward to the nearest basis point.
For purposes hereof, the "LIBOR Rate" shall mean a fluctuating
rate equal to the daily London Interbank Offered Rate for thirty
(30) days U.S. Dollar deposits as quoted by the Lender as of
11:00 A.M. (Washington, D.C., time), which rate shall be adjusted
for any Federal Reserve Board reserve requirements imposed upon
the Lender from time to time (the "LIBOR Rate"). The interest
rate on all sums accruing interest at the LIBOR Rate under this
Note shall change on the first day of each month, based on the
LIBOR Rate as of the last day of the immediately preceding month.
All interest payable under the terms of this Note shall be
calculated on the basis of a 360-day year and the actual number
of days elapsed.
2. Payments and Maturity. The unpaid Principal Sum,
together with interest thereon at the rate or rates provided
above, shall be payable as follows:
(a) The unpaid Principal Sum shall be due and payable
in monthly installments of principal in the amount of $66,666.66
each, plus accrued and unpaid interest, commencing October 31,
1997, and on the last day of each month thereafter to maturity;
(b) Unless sooner paid, the unpaid Principal Sum,
together with interest accrued and unpaid thereon, shall be due
and payable in full on September 9, 2002.
3. Default Interest. Upon the occurrence of an Event of
Default (as hereinafter defined), the unpaid Principal Sum shall
bear interest thereafter at a rate two percent (2%) per annum in
excess of the then current rate or rates of interest hereunder
until such Event of Default is cured.
4. Late Charges. If the Borrowers shall fail to make any
payment under the terms of this Note within fifteen (15) days
after the date such payment is due, the Borrowers shall pay to
the Lender on demand a late charge equal to five percent (5%) of
such payment.
5. Application and Place of Payments. All payments, made
on account of this Note shall be applied first to the payment of
any late charge then due hereunder, second to the payment of
accrued and unpaid interest then due hereunder, and the
remainder, if any, shall be applied to the unpaid Principal Sum,
with application first made to all principal installments then
due hereunder, next to the outstanding principal balance due and
owing at maturity and thereafter to the principal payments due in
the inverse order of maturities. Notwithstanding any provision
contained herein to the contrary, any portion of a permitted
partial prepayment applied to the unpaid Principal Sum shall be
applied first to the outstanding principal balance due and owing
at maturity and thereafter to the principal payments due in the
inverse order of maturities. All payments on account of this
Note shall be paid in lawful money of the United States of
America in immediately available funds during regular business
hours of the Lender at its principal office in Bethesda, Maryland
or at such other times and places as the Lender may at any time
and from time to time designate in writing to the Borrowers. The
Lender is authorized to deduct any payment (including payments of
principal and/or interest as above provided) from the Borrowers'
Account Number _____________ on or after the date the payment is
due; provided, however, that such authorization shall not be
deemed to relieve the Borrowers from their joint and several
obligation to make such payment when it is due.
6. Financing Agreement and Other Financing Documents.
This Note is the "Facility 1 Note" described in a Financing and
Security Agreement of even date herewith by and among the
Borrowers, Conceptronic, Inc. ("Conceptronic") and the Lender (as
amended, modified, restated, substituted, extended and renewed at
any time and from time to time, the "Financing Agreement"). The
indebtedness evidenced by this Note is included within the
meaning of the term "Obligations" as defined in the Financing
Agreement. The term "Financing Documents" as used in this Note
shall mean collectively this Note, the Facility 2 Note, the
Facility 2 Term Notes, the Facility 3 Note, the Facility 4 Note,
the Financing Agreement and any other instrument, agreement, or
document previously, simultaneously, or hereafter executed and
delivered by the Borrowers, Conceptronic and/or any other person,
singularly or jointly with any other person, evidencing,
securing, guaranteeing, or in connection with the Principal Sum,
this Note, the Facility 2 Note, the Facility 2 Term Notes, the
Facility 3 Note, the Facility 4 Note and/or the Financing
Agreement. All capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the
Financing Agreement.
7. Prepayment. The Borrowers may prepay the Principal
Sum in whole or in part, at any time or from time to time,
without premium or penalty. Any prepayment, in whole or in part,
will not affect the Borrowers' joint and several obligation to
continue making payment in connection with any swap agreement (as
defined in 11 U.S.C. 101), which will remain in full force and
effect notwithstanding that prepayment.
8. Security. This Note is secured as provided in the
Financing Agreement.
9. Events of Default. The occurrence of any one or more
of the following events shall constitute an event of default
(individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender
when due, after all applicable cure periods, if any, any and all
amounts payable by the Borrowers to the Lender under the terms of
this Note; or
(b) The occurrence of an event of default (as defined
therein) under the terms and conditions of any of the other
Financing Documents.
10. Remedies. Upon the occurrence of an Event of Default,
at the option of the Lender, all amounts payable by the Borrowers
to the Lender under the terms of this Note shall immediately
become due and payable by the Borrowers to the Lender without
notice to the Borrowers or any other person, and the Lender shall
have all of the rights, powers, and remedies available under the
terms of this Note, any of the other Financing Documents and all
applicable laws. The Borrowers and all endorsers, guarantors,
and other parties who may now or in the future be primarily or
secondarily liable for the payment of the indebtedness evidenced
by this Note hereby severally waive presentment, protest and
demand, notice of protest, notice of demand and of dishonor and
non-payment of this Note and expressly agree that this Note or
any payment hereunder may be extended from time to time without
in any way affecting the liability of the Borrowers, guarantors
and endorsers.
Until such time as the Lender is not committed to extend
further credit to the Borrowers and all Obligations of the
Borrowers to the Lender have been indefeasibly paid in full in
cash, and subject to and not in limitation of the provisions set
forth in the next following paragraph below, the Borrowers shall
not have any right of subrogation (whether contractual, arising
under the Bankruptcy Code or otherwise), reimbursement or
contribution from any of the Borrowers or any guarantor, nor any
right of recourse to its security for any of the debts and
obligations of any of the Borrowers which are the subject of this
Note. Except as otherwise expressly permitted by the Financing
Agreement, any and all present and future debts and obligations
of any of the Borrowers to either of the Borrowers are hereby
subordinated to the full payment and performance of all present
and future debts and obligations to the Lender under this Note
and the Financing Agreement and the Financing Documents,
provided, however, notwithstanding anything set forth in this
Note to the contrary, prior to the occurrence of a payment
Default, the Borrowers shall be permitted to make payments on
account of any of such present and future debts and obligations
from time to time in accordance with the terms thereof.
The Borrowers further agree that, if any payment made by any
of the Borrowers or any other person is applied to this Note and
is at any time annulled, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required
to be refunded or repaid, or the proceeds of any property
hereafter securing this Note is required to be returned by the
Lender to any of the Borrowers, its estate, trustee, receiver or
any other party, including, without limitation, such Borrower,
under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or
repayment, such Borrower's liability hereunder (and any lien,
security interest or other collateral securing such liability)
shall be and remain in full force and effect, as fully as if such
payment had never been made, or, if prior thereto any such lien,
security interest or other collateral hereafter securing such
Borrower's liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender, this Note
(and such lien, security interest or other collateral) shall be
reinstated in full force and effect, and such prior cancellation
or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of such Borrower in respect of
the amount of such payment (or any lien, security interest or
other collateral securing such obligation).
The JOINT AND SEVERAL obligations of each of the Borrowers
under this Note shall be absolute, irrevocable and unconditional
and shall remain in full force and effect until the outstanding
principal of and interest on this Note and all other Obligations
or amounts due hereunder and under the Financing Agreement and
the Financing Documents shall have been indefeasibly paid in full
in cash in accordance with the terms thereof and this Note shall
have been canceled.
11. Expenses. The Borrowers, jointly and severally,
promise to pay to the Lender on demand by the Lender all costs
and expenses incurred by the Lender in connection with the
collection and enforcement of this Note, including, without
limitation, reasonable attorneys' fees and expenses and all court
costs.
12. Notices. Any notice, request, or demand to or upon the
Borrowers or the Lender shall be deemed to have been properly
given or made when delivered in accordance with Section 11.01 of
the Financing Agreement.
13. Miscellaneous. Each right, power, and remedy of the
Lender as provided for in this Note or any of the other Financing
Documents, or now or hereafter existing under any applicable law
or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in
this Note or any of the other Financing Documents or now or
hereafter existing under any applicable law, and the exercise or
beginning of the exercise by the Lender of any one or more of
such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such
other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term,
condition, covenant, or agreement of this Note or any of the
other Financing Documents, or to exercise any right, power, or
remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant, or agreement or of
any such breach, or preclude the Lender from exercising any such
right, power, or remedy at a later time or times. By accepting
payment after the due date of any amount payable under the terms
of this Note, the Lender shall not be deemed to waive the right
either to require prompt payment when due of all other amounts
payable under the terms of this Note or to declare an Event of
Default for the failure to effect such prompt payment of any such
other amount. No course of dealing or conduct shall be effective
to amend, modify, waive, release, or change any provisions of
this Note.
14. Partial Invalidity. In the event any provision of this
Note (or any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the
affected provision) of this Note; but this Note shall be
construed as if such invalid, illegal, or unenforceable provision
(or part thereof) had not been contained in this Note, but only
to the extent it is invalid, illegal, or unenforceable.
15. Captions. The captions herein set forth are for
convenience only and shall not be deemed to define, limit, or
describe the scope or intent of this Note.
16. Applicable Law. Each of the Borrowers acknowledges and
agrees that this Note shall be governed by the laws of the State
of Maryland, even though for the convenience and at the request
of the Borrowers, this Note may be executed elsewhere.
17. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR
AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE
ARISING OUT OF THIS NOTE OR ANY RELATED INSTRUMENTS, AGREEMENTS
OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN
ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLIC
ABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE,
INC., D/B/A J.A.M.S./ENDISPUTE ("J.A.M.S.") AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF AN INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS INSTRUMENT,
AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED
IN XXXXXXXXXX COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO
WILL APPOINT AN ARBITRATOR. IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN
ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING
OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING
FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS
INSTRUMENT, NOTE SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY
OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND
ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE
LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF
THE LENDER: (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVI
SIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
18. Consent to Jurisdiction. Each of the Borrowers
irrevocably submits to the jurisdiction of any state or federal
court sitting in the State of Maryland over any suit, action, or
proceeding arising out of or relating to this Note. Each of the
Borrowers irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought
in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an
inconvenient forum. Final judgment in any such suit, action, or
proceeding brought in any such court shall be conclusive and
binding upon the Borrowers and may be enforced in any court in
which the Borrowers are subject to jurisdiction by a suit upon
such judgment provided that service of process is effected upon
the Borrowers as provided in this Note or as otherwise permitted
by applicable law.
19. WAIVER OF TRIAL BY JURY. EACH OF THE BORROWERS HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWERS, OR EITHER OF THEM, AND THE LENDER MAY BE PARTIES,
ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B)
THE FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY
THE BORROWERS, AND THE BORROWERS HEREBY REPRESENT THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER
REPRESENT THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS
NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD
THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
IN WITNESS WHEREOF, the Borrowers have caused this Note to
be executed under seal by their duly authorized officers as of
the date first written above.
WITNESS/ATTEST: ARGUSS HOLDINGS, INC.
______________________________
By:__________________________________(SEAL)
Xxxxxx X. Xxxxxx
Chief Financial Officer
WITNESS/ATTEST: WHITE MOUNTAIN
CONSTRUCTION CABLE CORP.
______________________________
By:__________________________________(SEAL)
H. Xxxxxxx Xxxxxx, III
Vice President
