EX-10.1 2 d719312dex101.htm LOAN AND SECURITY AGREEMENT LOAN AND SECURITY AGREEMENT Dated as of April 25, 2014 Among Lighting Science Group Corporation, and BioLogical Illumination, LLC (Borrowers) FCC, LLC, d/b/a First Capital (as Agent) and Various...
Exhibit 10.1
Dated as of April 25, 2014
Among
Lighting Science Group Corporation,
and
BioLogical Illumination, LLC
(Borrowers)
FCC, LLC, d/b/a First Capital
(as Agent)
and
Various Financial Institutions
(as Lenders)
TABLE OF CONTENTS
| Page | ||||||
| 1. | DEFINITIONS | 1 | ||||
| 2. | BORROWING | 20 | ||||
| 3. | INTEREST AND FEES | 26 | ||||
| 4. | REPRESENTATIONS AND WARRANTIES OF BORROWERS | 28 | ||||
| 5. | COLLATERAL | 30 | ||||
| 6. | FINANCIAL COVENANTS | 32 | ||||
| 7. | COLLATERAL COVENANTS | 32 | ||||
| 8. | OTHER COVENANTS | 34 | ||||
| 9. | REPORTING AND INFORMATION | 38 | ||||
| 10. | INSPECTION RIGHTS; EXPENSES; ETC. | 40 | ||||
| 11. | RIGHTS OF SETOFF, APPLICATION OF PAYMENTS, ETC. | 40 | ||||
| 12. | ATTORNEY-IN-FACT | 41 | ||||
| 13. | DEFAULTS AND REMEDIES | 41 | ||||
| 14. | INDEMNIFICATION | 45 | ||||
| 15. | GENERAL PROVISIONS | 46 | ||||
| 16. | AGENT | 50 | ||||
| 17. | LETTERS OF CREDIT | 52 |
Attachments:
Schedule
Exhibit A—Form of Borrowing Base Certificate
Exhibit B—Form of Compliance Certificate
This LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of April 25, 2014 among LIGHTING SCIENCE GROUP CORPORATION, a Delaware corporation (“LSG”), BIOLOGICAL ILLUMINATION, LLC, a Delaware limited liability company (“BioLogical”; LSG and BioLogical are referred to collectively as “Borrowers” and each individually as a “Borrower”), the various financial institutions from time to time party hereto as lenders (collectively, “Lenders”), and FCC, LLC, d/b/a FIRST CAPITAL, a Florida limited liability company (“First Capital”), in its capacity as agent for Lenders (together with its successors and assigns in such capacity, “Agent”).
NOW, THEREFORE, Borrowers, Agent and Lenders hereby agree as follows:
1. Definitions. For purposes of this Agreement:
“Accounts” means all presently existing or hereafter arising accounts receivable due to a Borrower, book debts, notes, drafts and acceptances and other forms of obligations now or hereafter owing to a Borrower, whether or not arising from the sale or lease of goods or the rendition of services by a Borrower (including any obligation that might be characterized as an account, contract right, general intangible or chattel paper under the UCC), all of each Borrower’s rights in, to and under all purchase orders now or hereafter received by such Borrower for goods and services, all proceeds from the sale of Inventory, all monies due or to become due to such Borrower under all contracts for the sale or lease of goods or the rendition of services by such Borrower (whether or not yet earned) (including the right to receive the proceeds of said purchase orders and contracts), all collateral security and guarantees of any kind given by any obligor with respect to any of the foregoing, all amounts payable to any Borrower under any insurance policy and all goods returned to or reclaimed by a Borrower that correspond to any of the foregoing.
“Accounts Formula Amount” means, as of any date of determination, 85% of the dollar amount of all Eligible Accounts.
“Accrued Rebate Reserve” means an amount determined from time to time by Agent in its Permitted Discretion as a reserve based upon 85% of the amount of Eligible Accounts that are or may become subject to any accrued rebate (including accrued rebates to Customers on account of volume bonuses, pass-through utility rebates, incentive marketing programs or similar programs).
“Acquisition” means (a) the purchase or other acquisition by a Person of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, consolidation, or otherwise) by a Person of all or substantially all of the equity interests of any other Person. For the avoidance of doubt, no Acquisition by any Obligor shall constitute a capital expenditure.
“Affiliate” means, with respect to a Person, (a) any family member, officer, director, employee or managing agent of such Person, and (b) any other Person (i) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such given Person, (ii) that, directly or indirectly beneficially owns or holds 10% or more of any class of voting stock, membership interests, partnership interests or other interest of such Person or any subsidiary of such Person, or (iii) 10% or more of the voting stock, membership interests, partnership interests or other interest of which is directly or indirectly beneficially owned or held by such Person or a subsidiary of such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting stock, membership interests, partnership interests or other interest, by contract or otherwise.
“Agreement Date” means the date as of which this Agreement is dated.
“Borrowers’ Agent” means LSG.
“Borrowing Base” has the meaning set forth in Item 1 of the Schedule.
“Borrowing Base Certificate” means the certificate, substantially in the form of Exhibit A, with appropriate insertions, to be submitted to Agent by Borrowers’ Agent pursuant to this Agreement and certified as true and correct by the Chief Executive Officer, the Chief Financial Officer, the Treasurer or the Controller of Borrowers’ Agent.
“Business Day” means any day excluding Saturday, Sunday, and any day which is a legal holiday under the laws of the State of Georgia or which is a day on which Agent is otherwise closed for transacting business with the public.
“Cash Event Conditions” means, with respect to any Acquisition, Investment or loan, the satisfaction of each of the following conditions: (a) such Acquisition, Investment or loan occurs on or after January 1, 2015, (b) at the time of such Acquisition, Investment or loan, and immediately after giving effect thereto, the Fixed Charge Coverage Ratio is at least 1.00 to 1.00, (c) upon giving pro forma effect to such Acquisition, Borrowers’ borrowing availability as of the last day of each of the three months immediately preceding such Acquisition, Investment or loan has equaled or exceeded $4,000,000, and (d) upon giving pro forma effect to such Acquisition, Investment or loan, Borrowers’ projected borrowing availability shall equal or exceed $4,000,000 as of the date of such Acquisition, Investment or loan and as of the last day of each of the three months immediately succeeding such Acquisition, Investment or loan.
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“Certificates of Designation” means, collectively, the Certificates of Designation filed with the Delaware Secretary of State with respect to the Series H Preferred Shares of LSG, Series I Preferred Shares of LSG and the Series J Preferred Shares of LSG, in each case as in effect on the Agreement Date.
“Change of Control” means (a) the transfer (in one transaction or a series of transactions) of all or substantially all of the assets of any Borrower or any other Obligor to any Person or group (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as in effect from time to time), other than as permitted in Section 8(a) hereof; (b) the liquidation or dissolution of any Borrower or any other Obligor or the adoption of a plan by the stockholders of any Borrower or any other Obligor relating to the dissolution or liquidation of such Borrower or such Obligor; (c) the acquisition by any Person or group (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as in effect from time to time), except for Sponsor, of beneficial ownership, directly or indirectly, of a greater share of the voting power of the total outstanding voting stock of any Borrower or any Guarantor or the board of directors of any Borrower than is held by the Sponsor at such time; (d) (i) Sponsor fails to (i) own and control, directly or indirectly, more than 35.0% of the equity interests of any Borrower having the right to vote for the election of members of the board of directors of such Borrower or (ii) own and control, directly or indirectly, more than 35.0% of the economic interests in respect of the equity interests of any Borrower; or (e) the failure of LSG to own directly or indirectly one hundred percent (100.0%) of the voting power of the total outstanding voting stock of any other Obligor, except as expressly permitted under Section 8(a) hereof.
“Collateral” has the meaning set forth in Section 5(a).
“Curative Equity Contribution” has the meaning set forth in Section 13(c). For the avoidance of doubt, the forgiveness of antecedent debt (whether indebtedness, trade payables, or otherwise) shall not constitute a Curative Equity Contribution.
“Customer” means any customer of a Borrower.
“Customs Reserve” means an amount determined from time to time by Agent in its Permitted Discretion as a reserve that could be asserted by the United States Customs and Border Protection, customs brokers, shippers, freight forwarders, carriers, warehousemen or any other Person, for fees, charges, customs tariffs and duties and other similar charges to be paid by a Borrower with respect to Eligible In-Transit Inventory.
“Default” has the meaning set forth in Section 13(a).
“Dilution” means, at the time it is being calculated and for the period of determination established by Agent as of such time of calculation, a percentage that is the result of dividing the dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other non-cash reductions with respect to the outstanding Accounts, by (b) the Accounts created by Borrowers during such period.
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“Dilution/Accrued Rebate Reserve” means, at any date of determination, a reserve equal to the greater of (a) the Dilution Reserve as of such date, and (b) the Accrued Rebate Reserve as of such date.
“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by one or more percentage points, as determined by Agent, for each percentage point by which Dilution of such Accounts is in excess of 5.00%.
“Disqualified Equity Interests” shall mean any equity interest that, by its terms (or by the terms of any security or other equity interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Obligations that are accrued and payable and the termination of the commitments of Agent and Lenders hereunder), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Obligations that are accrued and payable and the termination of the commitments of Agent and Lenders hereunder), (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other equity interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the termination date provided for in Item 7 of the Schedule.
“Eligible Accounts” means those Accounts arising from the sale of Inventory or performance of services in the ordinary course of a Borrower’s business, net of all credits and rebates; provided, however, that Eligible Accounts shall not include the following unless Agent has otherwise agreed in its Permitted Discretion:
(a) any Account which has remained unpaid for more than the number of days specified in Item 2(a) of the Schedule;
(b) Accounts with respect to which the Customer is an Affiliate of a Borrower;
(c) Accounts with respect to which services or goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Customer may be conditional;
(d) Accounts with respect to which the Customer (i) does not maintain its chief executive office in the United States or (only to the extent that such Accounts are denominated in United States dollars and payment thereof is directed to the lockbox designated by Agent in the United States) Canada, or (ii) is not organized under the laws of the United States of America or any state thereof or (only to the extent that such Accounts are denominated in United States
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dollars and payment thereof is directed to the lockbox designated by Agent in the United States) Canada or any province thereof; provided, that the aggregate amount of Eligible Accounts with respect to which the Customer maintains its chief executive office in Canada or is organized under the laws of Canada or a province thereof may not exceed at any time (x) $2,500,000, or (y) such higher amount as Agent may consent to from time to time (such consent not to be unreasonably withheld) upon request of Borrowers’ Agent and Agent’s receipt and review of such supporting information as Agent may reasonably require in connection with such an increase request;
(e) any and all Accounts as to which the perfection, enforceability, or validity of Agent’s Collateral or security interest in such Account, or Agent’s right or ability to obtain direct payment to Agent of the proceeds of such Account, is governed by any federal or state statutory requirements other than those of the Uniform Commercial Code, including any Account subject to the Federal Assignment of Claims Act of 1940; provided, however, that an Account shall not be deemed ineligible by reason of this clause (e) if Borrowers have completed all of the steps necessary, in Agent’s good faith determination, to comply with the Federal Assignment of Claims Act of 1940 with respect to such Account;
(f) Accounts with respect to which the Customer is any state of the United States or any city, town, municipality, county or division thereof, provided, however, that an Account shall not be deemed ineligible by reason of this clause (f) if Borrowers have completed all of the steps necessary, in Agent’s good faith determination, to comply with the applicable laws with respect to such Account;
(g) Accounts which may be subject to any offset or recoupment by the Customer, whether as the result of goods sold or services rendered by the Customer to a Borrower, any contractual arrangement between the Customer and a Borrower (including any lease) or otherwise, but only to the extent of any such offset or recoupment;
(h) all of the Accounts owed by a Customer if the percentage of the aggregate outstanding dollar amount of such Accounts owed by such Customer not considered as Eligible Accounts under clause (a) above, determined as a percentage of all Accounts, is equal to or greater than the Cross Aging Percentage specified in Item 2(b) of the Schedule;
(i) Accounts for which services have not yet been rendered to the Customer or the goods sold have not yet been delivered to the Customer (commonly referred to as “pre-billed accounts”);
(j) Accounts owed by a Customer not previously approved in writing by Agent where the dollar value for the aggregate amount of Accounts owed by such Customer is greater than the percentage of Borrowers’ Eligible Accounts specified in Item 2(c) of the Schedule, but only to the extent of such excess;
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(k) any Account with respect to all or part of which a check, promissory note, draft, trade acceptance, or other instrument for the payment of money has been received, presented for payment, and returned uncollected for any reason;
(l) any Account with respect to which a Borrower has extended the time for payment in excess of 60 days after the original due date without the consent of Agent;
(m) any Account with respect to which any one or more of the following events has occurred to the Customer on such Account: death or judicial declaration of incompetency of a Customer who is an individual; the filing by or against the Customer of a request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or similar laws of the United States, any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect; the making of any general assignment by the Customer for the benefit of creditors; the appointment of a receiver or trustee for the Customer or for any of the assets of the Customer, including, without limitation, the appointment of or taking possession by a “custodian,” as defined in the Bankruptcy Code; the institution by or against the Customer of any other type of insolvency proceeding (under the bankruptcy laws of the United States or otherwise) or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of affairs of, the Customer; the sale, assignment, or transfer of all or any material part of the assets of the Customer; the nonpayment generally by the Customer of its debts as they become due; or the cessation of the business of the Customer as a going concern;
(n) any Account which arises out of finance or similar charges;
(o) any Account in which Agent does not have a duly perfected, first-priority security interest, subject to Permitted Liens;
(p) any Account which arises under a contract or arrangement covered by a performance or surety bond on behalf of a Borrower, unless the Person providing such performance or surety bond has delivered an acceptable Lien waiver or subordination agreement to Agent;
(q) any Account which is evidenced by a note, draft, trade acceptance, or other instrument for the payment of money where such instrument, document, chattel paper, note, draft, trade acceptance or other instrument has not been endorsed and delivered by the applicable Borrower to Agent;
(r) Accounts with respect to which the Customer is the government of any foreign country or of any state, province, municipality, or other political subdivision thereof, unless the Account is supported by an irrevocable letter of credit satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent;
(s) any Account which represents a progress billing or an aged credit; or
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(t) any Account owed by the Specified Account Debtor with respect to which less than 6 calendar days have elapsed since the date of the original invoice date therefor; or
(u) those Accounts where Agent, in Agent’s Permitted Discretion, has notified Borrowers that the Account or Customer is not acceptable to Agent.
“Eligible In-Transit Inventory” means Inventory that meets all of the criteria for Eligible Inventory on such the applicable date of determination except that it is located outside of the continental United States and constitutes In-Transit Inventory, but only if:
(a) under the terms of the contract, title and risk of loss with respect to such Inventory has passed to a Borrower on or before such date;
(b) no Borrower is in default of any of its obligations to the Vendor thereof (whether related to such Inventory or otherwise), and neither the Vendor nor such Vendor’s financial institution (if applicable) has any right on such date, under applicable law or pursuant to any document relating to the sale of such Inventory, to reclaim, divert the shipment of, reroute, repossess, stop delivery of or otherwise assert any Lien rights or title retention with respect to such Inventory;
(c) all inspection or other requirements of law in the country of origin that are applicable to such Inventory and are a prerequisite to the shipment thereof have been satisfied;
(d) such Inventory is fully insured by Borrowers in such amounts, with such insurance companies and subject to such deductibles as are satisfactory to Agent and in respect of which Agent has been named as sole lender loss payee pursuant to a loss payable endorsement satisfactory to Agent;
(e) such Inventory complies in all material respects with all United States laws concerning safety and other similar laws applicable to such Inventory;
(f) such Inventory is in the possession of a common carrier, which is not an Affiliate of Vendor or a Borrower;
(g) such Inventory is evidenced by a tangible negotiable xxxx of lading issued by such carrier to the order of the applicable Borrower (or, if otherwise required by Agent in its discretion, to the order of Agent) which covers only such Inventory, bears a conspicuous notation on its face of Agent’s security interest therein (unless such xxxx of lading is issued to the order of Agent), and which is otherwise in form and substance satisfactory to Agent;
(h) all original counterparts of the xxxx of lading covering such Inventory are in the United States and are in the possession of Agent or an Eligible Logistics Provider;
(i) such Inventory has not been in transit for more than 60 days;
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(j) Borrowers have provided to Agent the tracking number issued by the Eligible Logistics Provider with respect to such In-Transit Inventory; and
(k) Agent shall have received a current spreadsheet providing shipment tracking information with respect to such In-Transit Inventory in accordance with Section 9(b).
“Eligible Inventory” means and includes that Inventory (other than packaging materials, labels and supplies) located in the continental United States which Agent, in its discretion, deems to be Eligible Inventory. Without limiting the generality of the foregoing, no Inventory shall be Eligible Inventory unless:
(a) it is finished goods;
(b) at all times it strictly complies with all of Borrowers’ warranties, covenants and representations to Agent and Lenders;
(c) it is in good, new and salable condition and has not been returned by any Customer;
(d) it is not slow-moving (the parties hereto acknowledging that an Inventory SKU shall be considered “slow-moving” for purposes hereof at any time that the volume of such SKU owned by Borrowers at such time exceeds Borrowers’ aggregate sales of such SKU in the preceding 12 month period; provided, that no SKU that has been sold by Borrowers for less than 12 months shall be considered slow-moving), obsolete or unmerchantable, in Agent’s Permitted Discretion;
(e) it meets all standards imposed by any governmental agency or authority;
(f) it is at all times subject to Agent’s duly perfected, first-priority security interest and there exists no other Lien thereon (other than Permitted Liens);
(g) it is in a Borrower’s possession and control situated at a location disclosed to Agent in compliance with this Agreement, the Inventory is not In-Transit Inventory, Borrowers’ books reflect the Inventory, the Inventory is insured to the full value thereof, and the insurance policy lists Agent as lender’s loss payee;
(h) it is not in the hands of any third party, including a warehouseman, finisher, consignee, xxxxxx, etc., unless such arrangement is fully disclosed to Agent in writing and Borrowers shall have provided to Agent such waivers or subordination agreements, acknowledgments and other items requested by Agent in its discretion;
(i) it is not subject to any license or other agreement that limits, conditions, or restricts any Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory (other than limitations imposed by the Specified Customer with respect to Borrowers’ “Ecosmart” LED lamp Inventory that are consistent with the limitations imposed with respect to such Inventory as of the Agreement Date);
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(j) a Borrower owns such Inventory and such Inventory is not in a Borrower’s possession based upon any consignment, guaranteed sale, or similar basis; and
(k) it is not of a type that Agent, in its Permitted Discretion, has determined is not Eligible Inventory;
provided, that, Specified Customer Inventory may constitute Eligible Inventory if (i) less than 6 calendar days have elapsed since the date of the original invoice date with respect to the Account arising from the sale of such Specified Customer Inventory, and (ii) such Specified Customer Inventory satisfies all of the criteria for Eligible Inventory except that (A) such Specified Customer Inventory is not in a Borrower’s possession and control situated at a location disclosed to Agent in compliance with this Agreement, and (B) no Borrower owns such Specified Customer Inventory.
“Eligible Logistics Provider” means any customs broker or non-vessel operating common carrier which has its principal assets, place of organization and place of business in the United States, which is acceptable to Agent, with whom Agent has entered into an Imported Goods Agreement, and which has not asserted any adverse claim or Lien against any In-Transit Inventory.
“Equipment” means all of Borrowers’ machinery, apparatus, equipment, motor vehicles, tractors, trailers, rolling stock, fittings, fixtures and other tangible personal property of every kind and description, together with all parts, accessories and special tools and all increases and accessions thereto and substitutions and replacements therefor.
“Excluded Collateral” has the definition set forth in Section 5(a) hereunder.
“Foreign Subsidiary” means any subsidiary of a Borrower that is formed, organized or incorporated in a jurisdiction outside of the United States.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board that are applicable to the circumstances as of the date of determination and applied on a consistent basis.
“General Intangibles” means all of Borrowers’ present and future general intangibles and all other presently owned or hereafter acquired intangible personal property of any Borrower (including payment intangibles, all rights under insurance policies and any and all choses or things in action, goodwill, patents and patent applications, tradenames, servicemarks, trademarks and trademark applications, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, infringement claims, software, computer programs, computer discs, computer tapes, literature, reports, catalogs, deposit accounts, tax refunds and tax refund claims) other than Goods and Accounts, as well as Borrowers’ books and records relating to any of the foregoing.
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“Goods” means all of Borrowers’ present and hereafter acquired goods, as defined in the UCC, wherever located, including imbedded software to the extent included in “goods” as defined in the UCC, manufactured homes, and standing timber that is to be cut and removed for sale.
“Guarantor” means Holdings or any other Person that has guaranteed all or any part of the Obligations, and “Guarantors” means all such Persons collectively.
“Holdings” means LSGC, LLC, a Delaware limited liability company.
“In-Transit Inventory” means Inventory that has been purchased by a Borrower and that is in-transit from a Vendor from a location outside the United States to such Borrower or a location designated by such Borrower that is in the United States.
“Inactive Subsidiaries” means Lighting Science Group B.V., Lighting Science India Private Limited, and Lighting Science Coöperatief U.A.
“Intellectual Property” means all (i) copyrights; (ii) patents; (iii) trademarks; and (iv) trade secrets, know-how and other proprietary information.
“Intercreditor Agreement” means the Intercreditor Agreement dated the date hereof between Agent and Medley, in its capacity as agent for the other Term Loan Parties.
“Inventory” means all of Borrowers’ inventory as defined in the UCC, together with all of Borrowers’ present and future inventory, including goods held for sale or lease or to be furnished under a contract of service and all of Borrowers’ present and future raw materials, work in process, finished goods, shelving and racking upon which the inventory is stored and packing and shipping materials, wherever located, and any documents of title representing any of the above.
“Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business), or acquisitions of indebtedness, equity interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person) (including any Acquisition), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such Investment.
“Letter of Credit” means a standby letter of credit issued by an issuing bank selected by Agent for the account of a Borrower pursuant to Section 17.
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“Letter of Credit Obligation” means, in respect of each Letter of Credit, the undrawn face amount of such Letter of Credit, plus the amount of all drawings under such Letter of Credit for which Agent has not been reimbursed by Borrowers pursuant hereto.
“Letter of Credit Sub-Facility Amount” means $2,500,000.
“Letter of Credit Request” means a request for the issuance of a Letter of Credit, duly executed by an authorized officer of Borrowers’ Agent in form, substance and detail satisfactory to Agent in its discretion, delivered to Agent pursuant to Section 17, together with the letter of credit application accompanying such request.
“Lien” means any security interest, security title, mortgage, deed to secure debt, deed of trust, lien, pledge, charge, conditional sale or other title retention agreement, or other encumbrance of any kind in respect of any property, including the interest of each lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets or properties of a Person, whether now owned or hereafter acquired and whether arising by agreement or operation of law.
“Loan Documents” means, collectively, this Agreement and all other agreements, instruments, certificates (including each Borrowing Base Certificate) and other documents executed and/or delivered in connection with this Agreement, including collateral documents, letter of credit agreements, security agreements, pledges, guaranties, mortgages, deeds of trust, assignments, subordination agreements, intercreditor agreements and all other agreements executed and/or delivered by any Obligor or any Affiliate of any Obligor pursuant hereto or in connection herewith.
“Management Fees” means management, advisory or other fees payable to any Affiliate of a Borrower.
“Maximum Line Amount” means $22,500,000.
“Medley” means Medley Capital Corporation, a Delaware corporation, and its successors and assigns.
“Negotiable Collateral” means all of Borrowers’ present and future letters of credit, advises of credit, notes, drafts, instruments, and documents, including, without limitation, bills of lading, leases, and chattel paper, and Borrowers’ books and records relating to any of the foregoing.
“Obligations” means all indebtedness, obligations and liabilities of Borrowers to Agent and Lenders and their respective Affiliates of every kind and description, direct or indirect, secured or unsecured, joint or several, absolute or contingent, due or to become due, including any overdrafts, whether for payment or performance, now existing or hereafter arising, whether presently contemplated or not, regardless of how the same arise, or by what instrument, agreement or book account they may be evidenced, or whether evidenced by any instrument, agreement or book account, including, but not limited to, all loans (including any loan by modification, renewal or extension), all indebtedness arising from any derivative transactions, all
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undertakings to take or refrain from taking any action, all indebtedness, liabilities or obligations owing from any Borrower to others which Agent or any Lender may have obtained by purchase, negotiation, discount, assignment or otherwise, and all interest, taxes, fees, charges, expenses and attorney’s fees (whether or not such attorney is a regularly salaried employee of Agent or any Lender or any of their respective Affiliates) chargeable to a Borrower or incurred by Agent or any Lender under this Agreement or any other document or instrument delivered in connection herewith.
“Obligor” means each Borrower, any Guarantor, any validity guarantor, any other Person primarily or secondarily, directly or indirectly, liable on any of the Obligations, or any other Person which has granted a Lien on any assets of such Person as collateral for any of the Obligations, and “Obligors” means all of the foregoing Persons collectively.
“Permitted Acquisition” means any Acquisition so long as:
(a) no Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual;
(b) the purchase consideration payable in respect of all Permitted Acquisitions (including the proposed Acquisition) shall be payable (i) from the net proceeds from the issuance of any Qualified Equity Interests of LSG, (ii) in the form of equity interests of LSG, or (iii) in cash (other than cash received from the issuance of any Qualified Equity Interests), earnout obligations, and assumed indebtedness and contingent liabilities, so long as all of the Cash Event Conditions have been satisfied and the aggregate amount of consideration paid pursuant to this clause (iii) in respect of any domestic Acquisitions does not exceed (x) $5,000,000 in the aggregate for all Permitted Acquisitions consummated in any fiscal year, (y) $10,000,000 in the aggregate for all Permitted Acquisitions consummated during the term of this Agreement and (z) in respect of Acquisitions of assets located outside the United States and equity Acquisitions of targets that are Foreign Subsidiaries, does not exceed $1,000,000 in the aggregate for all such Acquisitions consummated during the term of this Agreement (or, for the avoidance of doubt, with any combination of consideration described in clauses (i)-(iii) above),
(c) no indebtedness (including any indebtedness of the target of such Acquisition) will be incurred, assumed, or would exist with respect to any Borrower or Guarantor as a result of such Acquisition, other than indebtedness permitted under clauses (d) or (e) of the definition of Permitted Indebtedness and no Liens (including any Liens with respect to assets of the target of such Acquisition) will be incurred, assumed, or would exist with respect to the assets of any Borrower or Guarantor as a result of such Acquisition other than Permitted Liens;
(d) Borrower’s Agent has provided Agent with a Pro Forma Confirmation with respect to such proposed Acquisition;
(e) Borrowers have provided Agent with their due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person’s (or assets’) historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the one (1) year period following the date of the proposed Acquisition, on a quarter by quarter basis), in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent;
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(f) Borrower’s Agent has provided Agent with written notice of the proposed Acquisition at least thirty (30) days prior to the anticipated closing date of the proposed Acquisition and, not later than ten (10) Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Agent;
(g) the assets being acquired (other than a de minimis amount of assets in relation to Borrowers’ total assets), or the Person whose equity interests are being acquired, are useful in or engaged in, as applicable, the business of Borrowers or a business reasonably related thereto;
(h) the subject assets or equity interests, as applicable, are being acquired directly by a Borrower, and, in connection therewith, in the case of an acquisition of equity interests in a new subsidiary of one or more of the Borrowers, Borrowers shall cause such new subsidiary to take such steps as Agent shall require in its Permitted Discretion in order to join such new subsidiary as a “Borrower” or secured “Guarantor”, including executing such joinder or guaranty documentation, security documentation and lien release documentation as Agent shall request and demonstrating to Agent that such new subsidiary has received consideration sufficient to make such documents binding and enforceable against such new subsidiary;
(i) Borrowers shall demonstrate to Agent’s reasonable satisfaction, after giving effect to the proposed Acquisition, pro forma compliance with each of the financial covenants set forth on Item 21 of the Schedule; and
(j) the target of such Acquisition shall not have incurred a pro forma operating loss greater than $100,000, as determined based upon the target’s financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60) days prior to the date of consummation of such Acquisition using pro forma adjustments acceptable to the Agent.
“Permitted Discretion” means Agent’s sole discretion, consistent with Agent’s experience, prudent business judgment and standards of commercial reasonableness applicable to asset-based credits and in good faith.
“Permitted Dispositions” means:
(a) sales, abandonment, or other dispositions of Equipment, Inventory and software that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business, and leases or subleases of real property not useful in the conduct of the business of Borrowers and their subsidiaries; provided, that, Borrowers’ Agent shall provide Agent with five (5) Business Days’ prior written notice of the sale or other disposition of Equipment having an aggregate fair market value in excess of, individually or cumulatively with other Equipment, $500,000;
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(b) the granting of Permitted Liens;
(c) (i) the lapse of registered patents, trademarks, copyrights and other intellectual property of the Borrowers to the extent not economically desirable in the conduct of their business or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Agent and Lenders; and
(d) sales or dispositions of assets (other than equity interests of subsidiaries of Borrowers, accounts receivable, intellectual property or licenses) not otherwise permitted in clauses (a) through (c) above so long as (i) made at fair market value and the aggregate fair market value of all assets disposed of in each fiscal year (including the proposed disposition) would not exceed $150,000 and (ii) no Default shall have occurred and be continuing both immediately prior to and immediately after giving effect to any such sale or disposition.
“Permitted Indebtedness” means:
(a) indebtedness set forth on Item 14 of the Schedule;
(b) endorsement of instruments or other payment items for deposit;
(c) indebtedness consisting of (i) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions; and (ii) unsecured guarantees with respect to indebtedness of any Borrower, to the extent that the Person that is obligated under such guaranty could have incurred such underlying indebtedness;
(d) indebtedness constituting Permitted Investments;
(e) indebtedness of any Borrower arising after the Agreement Date to any third person (but not to any Borrower or any other Obligor) in respect of credit cards or related store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer and other cash management arrangements in an aggregate amount not to exceed $200,000 at any one time outstanding;
(f) unsecured Subordinated Debt of any Borrower arising after the Agreement Date to any third person (but not to any Borrower or any other Obligor); provided, that, each of the following conditions is satisfied as determined by Agent:
(i) such indebtedness shall be on terms and conditions acceptable to Agent and shall be subject and subordinate in right of payment to the right of Agent and Lenders to receive the prior indefeasible payment and satisfaction in full payment of all of the Obligations pursuant to its terms or, if requested by Agent in its discretion, pursuant to the terms of a subordination agreement between Agent and such third party, in form and substance reasonably satisfactory to Agent;
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(ii) Agent shall have received not less than ten (10) days prior written notice of the intention of such Borrower to incur such indebtedness, which notice shall set forth in reasonable detail satisfactory to Agent the amount of such indebtedness, the person or persons to whom such indebtedness will be owed, the interest rate, the schedule of repayments and maturity date with respect thereto and such other information as Agent may request with respect thereto;
(iii) Agent shall have received true, correct and complete copies of all agreements, documents and instruments evidencing or otherwise related to such indebtedness;
(iv) except as Agent may otherwise agree in writing, all of the proceeds of the loans or other accommodations giving rise to such indebtedness shall be paid to Agent for application to the Obligations in such order and manner as Agent may determine, or, at Agent’s option, to be held as cash collateral for the Obligations;
(v) in no event shall the aggregate principal amount of such indebtedness exceed $500,000 at any time outstanding; and
(vi) such Borrower shall not, directly or indirectly;
(A) amend, modify, alter or change the terms of such indebtedness or any agreement, document or instrument related thereto; except, that, any Borrower may, after prior written notice to Agent, amend, modify, alter or change the terms thereof so as to extend the maturity thereof, or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such indebtedness (other than pursuant to payments thereof), or to reduce the interest rate or any fees in connection therewith, or
(B) redeem, retire, defease, purchase or otherwise acquire such indebtedness (except pursuant to regularly scheduled payments permitted herein), or set aside or otherwise deposit or invest any sums for such purpose, and
(vii) Borrowers shall furnish to Agent all notices or demands in connection with such indebtedness either received by any Borrower or on its behalf promptly after the receipt thereof, or sent by any Borrower or on its behalf concurrently with the sending thereof, as the case may be.
“Permitted Intercompany Advances” means loans and other Investments made by (a) a Borrower to another Obligor, and (b) so long as Borrower’s Agent has provided Agent with a Pro Forma Confirmation with respect to such proposed loan or Investment, an Obligor to a Foreign Subsidiary of an Obligor to the extent that such loans or Investments are made (i) using the net proceeds from the issuance of any Qualified Equity Interests of LSG, (ii) in the form of equity interests of LSG, provided that the aggregate amount of Permitted Intercompany Advances under clauses (i) and (ii), taken together, does not exceed $10,000,000 at any time outstanding, (iii) in cash (other than cash received from the issuance of any Qualified Equity Interests), provided, that all of the Cash Event Conditions have been satisfied and the aggregate amount of Permitted Intercompany Advances pursuant to this clause (iii) does not exceed $250,000 at any time outstanding, or (iv) any combination of clauses (i) through (iii) hereof.
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“Permitted Investments” means, so long as Borrower’s Agent has provided Agent with a Pro Forma Confirmation with respect thereto:
(a) direct obligations of the United States of America maturing within one year from the acquisition thereof;
(b) certificates of deposit issued by, or investment accounts in, banks or financial institutions having a net worth of not less than $50,000,000;
(c) commercial paper rated A-1 by Standard & Poor’s Ratings Group or P-1 by Xxxxx’x Investors Service, Inc.;
(d) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business;
(e) Investments owned by any Borrower on the Agreement Date and set forth on Item 12 of the Schedule;
(f) guarantees permitted under the definition of Permitted Indebtedness;
(g) Permitted Intercompany Advances;
(h) loans and advances by Borrower to employees of Borrowers not to exceed the principal amount of $250,000 in the aggregate at any time outstanding for: (i) reasonable and necessary work-related travel or other ordinary business expenses to be incurred by such employees in connection with their work for Borrowers and (ii) reasonable and necessary relocation expenses of such employees (including home mortgage financing for relocated employees);
(i) stock or obligations issued to any Borrower by any Person (or the representative of such Person) in respect of indebtedness of such Person owing to such Borrower in connection with the insolvency, bankruptcy, receivership or reorganization of such Person or a composition or readjustment of the debts of such Person; provided, that, the original of any such stock or instrument evidencing such obligations shall be promptly delivered to Agent, upon Agent’s request, together with such stock power, assignment or endorsement by such Borrower as Agent may request;
(j) obligations of Customers to any Borrower arising from Accounts which are past due evidenced by a promissory note made by such Customer payable to such Borrower; provided, that, promptly upon the receipt of the original of any such promissory note by such Borrower, such promissory note shall be endorsed to the order of Agent by such Borrower and promptly delivered to Agent as so endorsed;
(k) Permitted Acquisitions; and
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(l) so long as Borrowers’ Agent provides at least fifteen (15) days prior written notice to Agent, other Investments in joint ventures or the acquisition of assets or equity interests in any Person (excluding Acquisitions) (i) using the net proceeds from the issuance of any Qualified Equity Interests of LSG, (ii) made through the issuance of Qualified Equity Interests of LSG, provided that the aggregate amount of Investments under clauses (i) and (ii), taken together, does not exceed $10,000,000 at any time outstanding, (iii) made in cash (other than cash received from the issuance of any Qualified Equity Interests), provided that all of the Cash Event Conditions have been satisfied and the aggregate amount of all Investments made under this clause (iii) shall not exceed $1,000,000 at any time outstanding, or (iii) pursuant to any combination of clauses (i) and (iii) hereof.
“Permitted Liens” means:
(a) Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or remain payable without any penalty, or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof and for which appropriate reserves have been established in accordance with GAAP;
(b) deposits or pledges to secure (i) statutory obligations, (ii) surety or appeal bonds, or (iii) bonds for release of attachment, stay of execution or injunction;
(c) statutory Liens (other than Liens for taxes or imposed under ERISA) on property arising in the ordinary course of business with respect to which payment of the obligations secured thereby is not yet due (or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof and for which appropriate reserves have been established in accordance with GAAP) and which, in the aggregate, do not materially impair the use of such property or materially detract from the value of such property;
(d) Liens existing on the Agreement Date and described on Item 3 of the Schedule;
(e) Liens on Equipment securing all or part of the purchase price of such Equipment; provided, however, that (i) each such Lien is created contemporaneously with the acquisition of such Equipment, (ii) each such Lien attaches only to the specific items of Equipment so acquired, and (iii) each such Lien secures only the indebtedness incurred to acquire such Equipment;
(f) the interests of lessors under operating leases and, as long as Agent has received prior written notice thereof, non-exclusive licensors under license agreements;
(g) Liens on amounts deposited to secure Borrowers’ obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money;
(h) with respect to any real property, easements, rights of way, zoning restrictions and other similar restrictions that do not materially interfere with or impair the use or operation thereof;
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(i) rights of setoff or bankers’ liens upon deposits of funds in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts in the ordinary course of business and Liens of a collection bank arising under Section 4-210 of the UCC on items in the course of collection;
(j) Liens arising from filing precautionary UCC financing statements regarding leases;
(k) Liens securing Permitted Indebtedness under clause (e) of such definition;
(l) Liens in favor of Medley securing the Term Loan Debt, provided that they are subject to the Intercreditor Agreement;
(m) Licenses and sublicenses of Intellectual Property granted to others which could not reasonably be expected to have a material adverse effect on any Borrower’s business or such Borrower’s financial or operational condition or prospects; and
(n) Liens in favor of Agent.
“Person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity.
“Pro Forma Confirmation” means, with respect to any Acquisition, Investment or loan, a written confirmation, supported by reasonably detailed calculations reasonably satisfactory to Agent, that on a pro forma basis (including pro forma adjustments arising out of events which are directly attributable to such proposed Acquisition, Investment or loan, are factually supportable, and are expected to have a continuing impact, in each case, determined as if the combination had been accomplished at the beginning of the relevant period; such eliminations and inclusions to be mutually and reasonably agreed upon by Borrowers and Agent) Borrowers would have been in compliance with the financial covenants set forth on Item 21 of the Schedule tested as of the applicable testing date ending immediately prior to the proposed date of consummation of such proposed Acquisition, Investment or loan; provided, that in the case of an Acquisition, such calculations shall be created by adding the historical combined financial statements of Borrowers and their subsidiaries (including the combined financial statements of any other Person or assets that were the subject of a prior Permitted Acquisition during the relevant period) to the historical consolidated financial statements of the Person to be acquired (or the historical financial statements related to the assets to be acquired) pursuant to the proposed Acquisition.
“Qualified Equity Interest” means and refers to any equity interest issued by LSG (and not by one or more of its subsidiaries) that is not a Disqualified Equity Interest.
“Second Lien Dominion Account” has the meaning ascribed to such term in the Intercreditor Agreement.
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“Service Fees Subordination Agreement” means that certain Service Fees Subordination Agreement dated on or about the Agreement Date among Pegasus Capital Advisors, L.P., Zouk Ventures Limited, Portman Limited, RW LSG Holdings LLC, RW LSG Management Holdings LLC, Borrowers and Agent.
“Specified Customer” shall have the meaning ascribed to such term in a letter agreement among Agent and Borrowers dated the Agreement Date.
“Specified Customer Default” means the occurrence of any of the following events: (a) any termination or nonrenewal of any agreement between a Borrower and the Specified Customer, (b) any Borrower receives a notification that LSG is no longer the Specified Customer’s preferred provider for private label LED light bulbs, or (c) LSG ceases to sell Inventory to the Specified Customer in the ordinary course of business.
“Specified Customer Inventory” means Inventory that has been sold by a Borrower to the Specified Customer.
“Specified Customer Scorecard” means any report or other document provided to Borrower from Specified Customer that includes any one or more of the following: (i) measurement of Borrower’s performance against the requirements contained in the Specified Customer’s contracts with any Borrower, (ii) any pricing adjustment, (iii) notice of failure to meet minimum criteria such as delivery dates, pricing, or fill rates, or (iv) notice of any other default under the Specified Customer’s contracts with any Borrower.
“Sponsor” means Pegasus Capital Advisors, L.P., a limited partnership organized under the laws of the State of Delaware, and its Affiliates (other than Borrowers and the other Obligors).
“Subordinated Debt” means all of the indebtedness owed by any Borrower to any other Person, the repayment of which is subordinated to the repayment of the Obligations pursuant to the terms of a subordination agreement approved by Agent in its discretion.
“Term Loan Agreement” means the Term Loan Agreement dated as of February 19, 2014, among LSG and Term Loan Parties, as the same may from time to time be amended, restated, supplemented or otherwise modified, or (to the extent permitted by the Intercreditor Agreement, refinanced).
“Term Loan Debt” shall mean all “Obligations” under (and as defined in) the Term Loan Agreement.
“Term Loan Documents” shall mean the Term Loan Agreement and all other instruments or agreements now or hereafter evidencing or securing the payment or performance of all or any part of the Term Loan Debt.
“Term Loan Parties” means each of the parties to the Term Loan Agreement from time to time as “Lenders” and Medley, in its capacity as agent for the other Term Loan Parties.
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“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of Georgia or of any other state the laws of which are required as a result thereof to be applied in connection with the issue of perfection of security interests; provided, however, that to the extent that the UCC is used to define any term herein or in any other documents and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern.
“Vendor” means a Person that sells In-Transit Inventory to a Borrower.
Other Definitional Provisions. References to the “Schedule” or any “Section” or “Exhibit” refer to the Schedule or a section or exhibit, respectively, of this Agreement unless otherwise specifically provided. Any of the terms defined in Section 1 may, unless the context otherwise requires, be used in the singular or the plural depending on the reference. In this Agreement: words importing any gender include the other genders; the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement; references to any Person includes their respective permitted successors and assigns or people succeeding to the relevant functions of such Persons; any and all terms which are defined in the UCC and are not defined herein shall be construed and defined in accordance with the definition of such terms under the UCC; all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; and all references to time of day shall refer to Atlanta, Georgia time.
(a) Amount Available to Be Borrowed. From time to time Borrowers’ Agent may request, and Lenders will, subject to the other terms and conditions of this Agreement, lend to Borrowers up to an amount equal to the Borrowing Base at any time. Any request for a loan hereunder must be received by Agent, together with the accompanying Borrowing Base Certificate and all other required information, no later than 11:00 a.m., Atlanta, Georgia time on a Business Day in order for such loan to be made on such day. Borrowed amounts that are repaid may be reborrowed upon the terms and conditions of this Agreement.
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were given by any such person, and neither Agent nor any Lender shall have any duty to inquire as to the propriety of any disbursement. Agent and Lenders are hereby authorized to make the loans provided for herein based on instructions received by facsimile, electronic mail, telephone or other method of communication from any of such persons. Although Agent shall make a reasonable effort to determine the person’s identity, neither Agent nor any Lender shall be responsible for determining the authenticity of any such instructions, and Agent and Lenders may act on the instructions of anyone that Agent or such Lender perceives to be one of the persons authorized to request loans hereunder. Agent shall have the right to accept the instructions of any of the foregoing persons unless and until Agent actually receives from Borrowers’ Agent (in accordance with the notice provisions of this Agreement) written notice of termination of the authority of that person. Borrowers’ Agent may change persons designated to give Agent borrowing instructions only by delivering to Agent written notice of such change. Borrowers’ Agent will ensure that each telephone instruction from any person designated in or pursuant to this paragraph shall be followed by written confirmation of the request for disbursement in such form as Agent makes available to Borrowers from time to time for such purpose; provided, however, that Borrowers’ Agent’s failure to provide written confirmation of any telephonic instruction shall not invalidate such telephonic instruction.
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appropriately endorsed, if necessary. Borrowers will be given credit for the purposes of calculating availability under the Borrowing Base immediately after such collections, including wire transfers, are posted to the depository account related to the lockbox required hereunder and immediately after such collections are posted to the depository account related to the lockbox required hereunder for all other purposes under this Agreement, including interest calculation. Collections shall be deemed posted to the depository account related to the lockbox required hereunder two (2) Business Days after receipt thereof in such lockbox. Borrowers will account fully and faithfully for and promptly pay or turn over to Agent proceeds in whatever form received of the sale or other disposition of any Collateral, and each Borrower agrees that the inclusion of proceeds in “Collateral” will not be deemed to mean that Agent or any Lender consents to any Borrower’s disposition of Collateral other than in accordance with the terms of this Agreement.
(i) Lenders have no obligation to make the initial loan to Borrowers or to extend any other financial accommodation to Borrowers unless and until (A) Borrowers deliver to Agent, in form and substance satisfactory to Agent in its discretion, each agreement, instrument, legal opinion and other document specified on Item 6 of the Schedule, and (B) each other condition precedent specified on Item 6 of the Schedule has been satisfied in a manner satisfactory to Agent in Agent’s discretion.
(ii) Lenders’ obligation to make any loans to Borrowers and extend other financial accommodations to Borrowers (including the initial loans) is subject to the conditions that, as of the date of any such loan or other accommodation, no Default (and no event or circumstance which, with the giving of notice or passage of time, would constitute a Default) will have occurred and be continuing hereunder, there will have occurred no material adverse change in any Borrower’s financial condition or operations or in any Borrower’s business prospects as compared to the state of facts existing on the Agreement Date, and Borrowers’ representations and warranties set forth in this Agreement (including any amendment, modification, supplement or extension hereof) and the other Loan Documents will be true and correct as if made on and as of the date of each subsequent credit request (except to the extent specifically referring to an earlier date). Each request for a borrowing or other financial accommodation by Borrowers’ Agent will be deemed to be a reaffirmation of each of Borrowers’ warranties and representations hereunder.
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immediately, without notice or demand, repay the outstanding principal amount of the loans, together with accrued and unpaid interest on the amount repaid, in an amount equal to such excess (it being understood that such excess amount, regardless of how it arose, shall nevertheless constitute an Obligation hereunder and be secured by all of the Collateral). Borrowers shall make each payment required hereunder or under any other Loan Document without setoff, deduction or counterclaim.
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(m) Joint and Several Liability.
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Obligations shall be conclusively presumed to have been created in reliance hereon. The Obligations and other liabilities under this Agreement and the other Loan Documents shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of any Loan Document or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payments of, or in any other term of, all or any part of the Obligations, or any other amendment or waiver thereof or any consent to departure therefrom, including any increase in the Obligations resulting from the extension of additional credit to any Borrower or otherwise; (c) any taking, exchange, release of or non-perfection in any Collateral, or any release or amendment or waiver of or consent to departure from any guaranty for all or any of the Obligations; (d) any change, restructuring or termination of the corporate structure or existence of any Borrower; or (e) any other circumstance which may otherwise constitute a defense available to, or a discharge of, any Borrower. This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all as though such payment had not been made.
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of the other Borrowers in an amount, for each of such other Borrowers, equal to a fraction of such Accommodation Payment, the numerator of which fraction is such other Borrower’s “Allocable Amount” (as defined below) and the denominator of which fraction is the sum of the Allocable Amounts of all of the Borrowers. As of any date of determination, the “Allocable Amount” of each Borrower shall be equal to the greater of (a) the amount of such repaid Obligations actually received by such Borrower (whether through an inter-company loan or otherwise), and (b) the maximum amount of liability for Accommodation Payments which could be asserted against such Borrower hereunder without (i) rendering such Borrower “insolvent” within the meaning of Title 11 of the United States Code (the “Bankruptcy Code”), Section 2 of the Uniform Fraudulent Transfer Act (the “UFTA”), or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (ii) leaving such Borrower with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 4 of the UFCA, or (iii) leaving such Borrower unable to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA. All rights and claims of contribution, indemnification and reimbursement under this paragraph shall be subordinate in right of payment to the prior payment in full of the Obligations.
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LIBOR for the following month as provided in subsection (a) hereof, or (ii) disruptions in the short term money markets have materially and adversely affected Agent’s and Lenders’ cost of funds such that the interest rate hereunder does not adequately or fairly reflect Agent’s and Lenders’ cost of making, funding or maintaining the loans hereunder, a “Market Disruption Event” will be deemed to have occurred and Agent shall promptly notify Borrowers’ Agent thereof. The rate of interest hereunder (the “Adjusted Rate of Interest”) shall be adjusted and shall thereafter be a rate equal to the sum of (x) the rate that Agent determines (which determination shall be conclusive and binding), expressed as a percentage rate per annum, to be the cost to Agent and Lenders of funding the loan from whatever source they may reasonably elect, plus (y) the Interest Margin. Agent shall give prompt notice to Borrowers’ Agent of the Adjusted Rate of Interest. Borrowers shall begin to be charged interest at the Adjusted Rate of Interest effective as of the first day of the month following the month in which Agent provides notice thereof to Borrowers’ Agent; provided, however, that if Borrowers are unwilling to accept the Adjusted Rate of Interest, they may terminate this Agreement and prepay all amounts due hereunder within thirty (30) days of the effective date of the Adjusted Rate of Interest without paying a prepayment fee.
(d) Fees. Borrowers will pay to Agent and Lenders the fees set forth in Item 10 of the Schedule.
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4. Representations and Warranties of Borrowers.
(a) Authority, Compliance with Laws, Litigation, No Material Adverse Change, Etc. Each Borrower represents and warrants to Agent and Lenders that: (i) such Borrower’s exact legal name, type of organization, state of organization and organizational identification number are fully and accurately set forth on Item 11 of the Schedule, and such Borrower is duly organized and validly existing under the laws of such state of organization; (ii) the execution, delivery, and performance of this Agreement and the other Loan Documents are within such Borrower’s corporate powers, have been duly authorized, do not violate such Borrower’s constituent documents, any law or regulation, including without limitation, any law or regulation relating to occupational health and safety or protection of the environment, applicable to such Borrower, or any indenture, agreement, or undertaking to which such Borrower is a party or by which such Borrower or such Borrower’s property is bound; (iii) this Agreement and the other Loan Documents to which such Borrower is a party constitute valid, binding and enforceable obligations of such Borrower in accordance with the terms hereof and thereof, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, moratorium or other similar laws applicable to creditors’ rights generally or by generally applicable equitable principles affecting the enforcement of creditors’ rights; (iv) such Borrower has no subsidiaries or other investments in other Persons, except as set forth on Item 12 of the Schedule; (v) such Borrower is in compliance in all material respects with all laws, rules and regulations applicable to such Borrower, including laws, rules or regulations concerning the environment, occupational health and safety and pensions or other employee benefits, and including the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq.; (vi) except as set forth on Item 13 of the Schedule, there is no litigation or investigation pending against such Borrower (or, so far as such Borrower is aware, threatened) which, if it were decided adversely to such Borrower, could reasonably be expected to have a material adverse effect on such Borrower, such Borrower’s financial or operational condition or such Borrower’s prospects (taking into account any insurance coverage that has been acknowledged by the insurer); (vii) other than debt that is to be repaid from the proceeds of the first advance hereunder, such Borrower is not indebted to any other Person for money borrowed nor has such Borrower issued any guaranty of payment or performance by any other Person, except as set forth on Item 14 of the Schedule; (viii) since the date of the financial statements of such Borrower most recently delivered to Agent, there has been no material adverse change in such Borrower’s business, such Borrower’s financial or operational condition or such Borrower’s business prospects; and (ix) such Borrower is, and after giving effect to the initial loans under this Agreement and the application of the proceeds of such loans such Borrower will be, solvent and has sufficient revenues to pay such Borrower’s obligations as they come due and adequate capital with which to conduct such Borrower’s business.
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defined in Regulation U of the Board of Governors of the Federal Reserve System); (ii) such Borrower owns no real property and leases no real property other than as listed on Item 18 of the Schedule; (iii) a true, correct and complete list of any warehousemen, processors, consignees or other bailees with possession or control of any Inventory is set forth on Item 18 of the Schedule; (iv) a list and brief description of all bank accounts maintained by such Borrower with any bank or financial institution is set forth on Item 19 of the Schedule; (v) there are no outstanding obligations under any employee stock purchase plan maintained by any Borrower except as disclosed in Item 5 of the Schedule; and (vi) no Obligor is a party to any agreement with, or engaged in any transaction with, Maxik Labs, Inc.
(i) all Accounts, Inventory, Equipment, Goods, General Intangibles and Negotiable Collateral;
(ii) all investment property, securities and securities accounts and financial assets, as well as all bank and deposit accounts and all funds on deposit therein;
(iii) all chattel paper (whether tangible or electronic) and contract rights;
(iv) all guaranties, collateral, Liens on real or personal property, leases, letters of credit, letter-of-credit rights, supporting obligations, and all other rights, agreements, and property securing or relating to payment of Accounts or any other Collateral;
(v) all documents, books and records relating to any Collateral or to such Borrower’s business;
(vi) all other property of such Borrower’s now or hereafter in the possession or control of Agent, any Lender or any of Agent’s or any Lender’s Affiliates (including cash, money, credits and balances of such Borrower held by or on deposit with Agent, and Lender or any Affiliate of Agent or any Lender);
(vii) all other assets of any Obligor in which Agent receives a security interest to secure all or part of the Obligations or which hereafter come into the possession, custody or control of Agent, any Lender or any Affiliate of Agent or any Lender;
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(viii) all of such Borrower’s commercial tort claims listed on (A) Item 20 of the Schedule (which such Borrower represents and warrants is a true, accurate and complete list of all of such Borrower’s commercial tort claims as of the Agreement Date) or (B) any other writing provided to Agent pursuant to Section 7(g); and
(ix) all proceeds and products of all of the foregoing in any form, including amounts payable under any policies of insurance insuring all or any of the foregoing against loss or damage, all parts, accessories, attachments, special tools, additions, replacements, substitutions and accessions to or for all or any of the foregoing, all condemnation or requisition payments with respect to all or any of the foregoing and all increases and profits received from all or any of the foregoing.
As used herein, “Excluded Collateral” means (i) equity interests of any subsidiary organized under the laws of a jurisdiction outside the United States of America, its territories or its possessions that is a “controlled foreign corporation” (as such term is defined in Section 957(a) of the Code or a successor provision thereof) in excess of sixty-five (65%) percent of all of the issued and outstanding shares of equity interests of such subsidiary entitled to vote (within the meaning of Treasury Regulation Section 1.956-2); or (ii) any contract, lease, permit, license, or license agreement covering real property or equipment or any rights or interest in any contract, lease, permit, license, or license agreement covering real property or equipment of any Borrower if under the terms of such contract, lease, permit, license, or license agreement, or applicable law with respect thereto, the grant of a security interest or Lien therein is prohibited as a matter of law or under the terms of such contract, lease, permit, license, or license agreement and such prohibition or restriction has not been waived or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided, that, (A) the foregoing exclusions of this clause (ii) shall in no way be construed (1) to apply to the extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the UCC or other applicable law, or (2) to apply to the extent that any consent or waiver has been obtained that would permit Agent’s security interest or lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement and (B) the foregoing exclusions of clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise affect any of Agent’s continuing security interests in and liens upon any rights or interests of any Borrower in or to (1) monies due or to become due under or in connection with any described contract, lease, permit, license, license agreement, or equity interests (including any Accounts or equity interests), or (2) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, or equity interests), solely during the period of such prohibition, and solely to the extent that a consent or waiver has not been obtained that permits Agent’s Lien notwithstanding the prohibition; or (iii) any United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law, provided that upon submission and acceptance by the US PTO of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use trademark application shall be considered Collateral; or (iv) the $3,000,000, together with interest earned thereon, on deposit on the date hereof in the Second Lien Dominion Account.
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For the sake of clarity, (i) any references in this Agreement or other Loan Documents to any portion or type of Collateral shall expressly exclude the Excluded Collateral and (ii) nothing in the foregoing shall be construed to limit, impair or otherwise affect any of Agent’s continuing security interest and liens upon any proceeds of Excluded Collateral.
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directly, and Agent may apply such proceeds or awards to payment of the Obligations, whether or not due, in such order of application as Agent determines or, in Agent’s sole discretion, apply such proceeds or awards, in whole or in part, to the replacement, restoration or rebuilding of the lost or damaged property. In all events, however, if requested by Borrowers in writing within 15 days after Agent’s receipt of any insurance proceeds or condemnation awards relating to any loss or destruction of Equipment, Borrowers may use such proceeds or awards to repair or replace such Equipment as long as (i) no Default exists; (ii) such repair or replacement is promptly undertaken and concluded and in all events within ninety (90) days, in accordance with plans satisfactory to Agent; (iii) the repaired or replaced Equipment is of comparable quality and utility and free of Liens, other than Permitted Liens that are not of the type described in clause (e) of the definition thereof; (iv) Borrowers comply with disbursement procedures for such repair or replacement as Agent may reasonably require; and (v) the aggregate amount of such proceeds or awards from any single casualty or condemnation does not exceed $500,000. Borrowers will provide to Agent from time to time certificates showing such coverage in effect and, at Agent’s request, the underlying policies.
(i) Each Borrower may merge with another Obligor as long as a Borrower is the surviving entity of any such merger to which it is a party;
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(ii) With the prior written consent of Agent, each Borrower may merge with a subsidiary of such Borrower that is not an Obligor so long as such Borrower is the surviving entity of any such merger;
(iii) Each Borrower may make Permitted Dispositions; and
(iv) Each Borrower may sell Inventory in the ordinary course of such Borrower’s business.
(i) No Borrower will retire, repurchase or redeem any of such Borrower’s capital stock or other ownership interest in such Borrower, nor declare or pay any dividend in cash or other property (other than additional shares of capital stock or additional ownership interests) to any owner or holder of such Borrower’s shares or other ownership interest; provided, that:
(A) any subsidiary of a Borrower may declare and pay dividends to such Borrower;
(B) Borrowers may repurchase equity interests consisting of common stock held by employees pursuant to any employee stock ownership plan thereof disclosed in Item 5 of the Schedule upon the termination, retirement or death of any such employee in accordance with the provisions of such plan; provided, that, as to any such repurchase, each of the following conditions is satisfied: (i) as of the date of the payment for such repurchase and after giving effect thereto, no Default shall exist or have occurred and be continuing, (ii) such repurchase shall be paid with funds legally available therefor, (iii) such repurchase shall not violate any law or regulation or the terms of any indenture, agreement or undertaking to which such Borrower is a party or by which such Borrower or its property is bound, and (iv) the aggregate amount of all payments for such repurchases in any calendar year shall not exceed $250,000;
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(C) LSG may redeem, retire, defease, purchase or otherwise acquire any shares of any class of its equity interests for consideration in the form of shares of common stock or Qualified Equity Interests, or the proceeds therefrom, so long as, in each case after giving effect thereto no Change of Control or other Default shall exist or occur; and
(D) LSG may effect a redemption of its Series H Preferred Shares, Series I Preferred Shares, and Series J Preferred Shares, in each case pursuant to the terms of the applicable Certificates of Designation; provided, that, in all events Borrowers shall indefeasibly repay the Obligations in full and cause all Letters of Credit to be cancelled and returned (or cash collateralized pursuant to Section 17(c)) at least 1 Business Day prior to the date on which LSG effects such redemption as permitted by this Section 8(c).
(ii) No Borrower will enter into a management or advisory agreement with, or pay any Management Fees except as permitted by the Service Fees Subordination Agreement.
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10. Inspection Rights; Expenses; Etc.
(a) Field Examinations; Inspections; Appraisals. Agent shall have the right without hindrance or delay to conduct field examinations to inspect the Collateral, all other assets of Borrowers or any portion thereof, Borrowers’ books and records and all other aspects of Borrowers’ business, and to examine and make copies of Borrowers’ records, the Collateral and all other assets of Borrowers or any portion thereof, in each case wherever located, and Agent may enter upon Borrowers’ premises for such purposes, without notice, during business hours. Borrowers will assist Agent in whatever way necessary to make each such examination and inspection, and Borrowers agree to pay for such examinations as more fully described on Item 27 of the Schedule. Agent may discuss Borrowers’ financial condition with Borrowers’ independent accountants without liability to Agent or such accountants. Agent shall give prior notice to Borrowers’ Agent of any such discussion unless a Default exists or Agent reasonably believes that any Collateral may diminish in value. Agent shall have full access to all records available to Borrowers from any credit reporting service, bureau or similar service and shall have the right to examine and make copies of any such records. Agent may exhibit a copy of this Agreement to such service and such service shall be entitled to rely on the provisions hereof in providing access to Agent as provided herein. Agent may, from time to time at Borrowers’ expense, obtain an appraisal on some or all of the Collateral; provided, however, that Borrowers shall only be obligated to reimburse Agent for any such appraisal no more than two (2) times per year; provided further, however, that any appraisal initiated during a Default shall be at Borrowers’ expense. For avoidance of doubt, Agent has the right to conduct unlimited appraisals of the Collateral (a) at Agent’s expense at any time when a Default is not in existence and (b) at Borrowers’ expense at any time when a Default is in existence.
11. Rights of Setoff, Application of Payments, Etc. Agent will be entitled to hold or set off all sums and all other property of Borrowers at any time to Borrowers’ credit or in Agent’s or any Lender’s possession (or the possession of any of Agent’s or any Lender’s Affiliates) by pledge or otherwise or upon or in which Agent may have a Lien, as security for any and all of the Obligations. Agent will have the right and is hereby irrevocably authorized and directed to charge to Borrowers’ account the amounts of any and all such Obligations. Recourse to the Collateral or other security for the Obligations will not at any time be required and each Borrower hereby waives any right of marshalling such Borrower may have. Each
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Borrower’s obligation to pay or repay the Obligations is unconditional. Each Borrower agrees that Agent may take such action with regard to the custody and collection of Accounts assigned to Agent as Agent may deem necessary. Each Borrower agrees that failure to take any action with regard to any given Account will not be unreasonable until and unless Agent receives a written request for specific action from Borrowers’ Agent with regard thereto and fails to respond thereto within a commercially reasonable time. Each Borrower irrevocably waives the right to direct the application of any and all payments and collections at any time or times hereafter received by Agent from or on behalf of any Borrower (including any rights a Borrower may have under Section 13-4-42 of the Official Code of Georgia), and each Borrower hereby irrevocably agrees that Agent shall have the continuing exclusive right to apply and reapply any and all such payments and collections received at any time or times hereafter by Agent or its agent against the Obligations, in such manner and in such order as Agent may deem advisable.
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Collateral, or the prospects of Borrowers’ payment of the Obligations or Agent’s ability to realize on any Collateral, in which case such 3 Business Day cure period shall not apply and a Default shall occur upon such breach or failure); (iii) non-payment when due of the premium on any insurance policy required to be maintained hereunder; (iv) any statement, representation, or warranty made in writing in this Agreement, any other Loan Document or in any other writing or statement at any time furnished or made or deemed furnished or made by any Borrower or any other Obligor to Agent or any Lender proves to have been untrue in any material respect as of the date furnished or made or deemed furnished or made; (v) any Borrower’s default under the Term Loan Agreement (and the expiration of any applicable cure period thereunder), or any one or more other agreements involving, in the aggregate, more than the amount set forth on Item 28 of the Schedule; (vi) suspension of the operation of any Borrower’s present business, except to the extent (A) arising from a merger permitted by Section 8(a), or (B) that a Permitted Disposition constitutes a partial suspension of the operation of any Borrower’s present business; (vii) any Obligor becomes insolvent or unable to pay its debts as they mature, or admits in writing that it is insolvent or unable to pay its debts, makes an assignment for the benefit of creditors, makes a conveyance fraudulent as to creditors under any state or federal law, a proceeding is instituted by or against any Obligor alleging that such Obligor is insolvent or unable to pay debts as they mature, a petition under any provision of Title 11 of the United States Code, as amended, is filed by any Obligor, or a petition under any provision of Title 11 of the United States Code, as amended, is filed against any Obligor and such petition filed against an Obligor is not dismissed within 60 days of the date of the filing thereof; (viii) entry of any one or more judgments against any Obligor that in the aggregate exceed the amount set forth on Item 29 of the Schedule, or creation, assertion, or filing of any judgment or tax Lien against the property of any Obligor, which in the case of any such judgment remains undischarged for 10 days after such entry or filing; (ix) the occurrence of a Specified Customer Default; (x) transfer of a substantial part (determined by market value) of the property of any Obligor; (xi) the occurrence of a Change of Control; (xii) termination, unenforceability or withdrawal of any guaranty, validity guaranty or support agreement for the Obligations, or failure of any Obligor to perform any of its obligations under such guaranty, validity guaranty or support agreement, or assertion by any Obligor that it has no liability or obligation under such a guaranty or validity guaranty; (xiii) appointment of a receiver for the Collateral or for any other property in which a Borrower has an interest; (xiv) seizure of any Collateral by any Person other than Agent; (xv) the occurrence of any act, omission, event or circumstance which has or could reasonably be expected to have a materially adverse effect on any Borrower or any other Obligor; (xvi) payment by any Borrower on any Subordinated Debt in violation of the applicable subordination agreement; or (xvii) the Pension Benefit Guaranty Corporation or the Department of Labor commences proceedings under ERISA to terminate any of Borrowers’ employee pension benefit plans.
(i) Agent and Lenders may terminate their commitment, if any, to make loans or to extend other financial accommodations to Borrowers, and may declare the entire principal amount of all loans outstanding hereunder, all interest thereon, any unpaid fees and all other
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Obligations of any kind or nature to be, and thereupon the same will immediately become, due and payable in full; and, in the event of a Default described under clause (vi) of Section 13(a), such termination and acceleration shall automatically occur without any notice, demand or presentment of any kind. Borrowers agree to deposit with Agent a cash sum equal to the amount of letters of credit and acceptances issued or guaranteed by Lenders or any of their Affiliates which have not been drawn upon or matured, which funds will be used to reimburse such Lenders or Affiliates upon drawing under any letter of credit or maturity of any acceptance.
(ii) Agent may decrease the advance rates set forth in the definition of “Borrowing Base” in Agent’s discretion.
(iii) Agent or Agent’s designee may notify Customers that the Accounts have been assigned to Agent and that Agent has a security interest therein, collect them directly, and charge the collection costs and expenses to Borrowers’ loan account.
(iv) Agent may (A) exercise any of its remedies under any other Loan Document, (B) apply any cash collateral to the Obligations (without limiting the foregoing, Agent may instruct any bank or other financial institution holding any cash, certificate of deposit or other Collateral to pay over such Collateral to Agent), and (C) draw on any letter of credit issued for the benefit of Agent or any Lender in connection with this Agreement or any other Loan Document and apply the proceeds thereof to the Obligations.
(v) Agent may make such payments and do such acts as Agent considers necessary or reasonable to protect its security interest in the Collateral. Each Borrower authorizes Agent to enter each premises where any Collateral is located, take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest or compromise any Lien which in Agent’s opinion appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.
(vi) Agent may ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale and sell the Collateral. Any such sale may be either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms. It is not necessary that the Collateral be present at any such sale.
(vii) Agent may, without regard to any waste, adequacy of the security or solvency of any Borrower, apply for the appointment of a receiver of the Collateral, to which appointment each Borrower hereby consents, whether or not foreclosure or repossession proceedings have been commenced hereunder or under any other Loan Document and whether or not a foreclosure sale or secured party sale has occurred.
(viii) Agent may cancel any insurance policy of a Borrower in exchange for a refund of the unearned premium with respect thereto, and each Borrower hereby authorizes any insurance company which has issued any such policy to make such payment directly to Agent for application to the Obligations.
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(ix) Agent may, at Agent’s option, exercise any of the remedies available to Agent as a secured party under the Uniform Commercial Code as in effect in any applicable jurisdiction, or otherwise available to Agent under applicable law. Each Borrower agrees, upon Default, to cease the sale or other disposition of the Collateral, except with Agent’s prior written consent, and to assemble at Borrowers’ expense all the Collateral at a convenient place acceptable to Agent. Agent may charge to Borrowers’ loan account and Borrowers will pay Agent upon demand all costs and expenses, including reasonable attorneys’ fees (including fees of attorneys that are regular salaried employees of Agent or any of its Affiliates), in connection with: (A) the liquidation of any Collateral; (B) obtaining or enforcing payment of the Obligations; (C) the settlement, adjustment, compromise, or litigation of Customer disputes; or (D) the prosecution or defense of any action or proceeding either against Agent, against any Lender, or against any Borrower concerning any matter growing out of or in connection with this Agreement and/or any Collateral and/or any Obligations. If at any time Agent pays any state, city, local, federal, or other tax or levy attributable to the Collateral, Borrowers will repay to Agent the amount of tax so paid by Agent. Each Borrower agrees that Agent may apply any proceeds from disposition of the Collateral first to satisfy obligations secured by Liens prior to Agent’s security interest. Each Borrower will remain liable and will pay on demand any deficiencies arising upon the liquidation of any Collateral held by Agent.
(i) Notwithstanding the existence of a Default resulting from a financial covenant violation under either Item 21(a) of the Schedule or Item 21(b) of the Schedule, a cash equity contribution (in the form of common equity or other Qualified Equity Interests having terms acceptable to Agent) made by Sponsor to LSG and immediately contributed to the capital of LSG, on or prior to the day that is ten (10) days after the day on which financial statements are required to be delivered for the applicable fiscal quarter, will, subject to the terms of clause (ii) of this Section 13(c), at the written request of Borrowers’ Agent, be included in the calculation of EBITDA, solely for the purposes of determining compliance with such financial covenant(s) at the end of such fiscal quarter and any subsequent period that includes such fiscal quarter (any such equity contribution, a “Curative Equity Contribution”).
(ii) All Curative Equity Contributions shall comply with the following conditions:
(A) the amount of any Curative Equity Contribution will not be greater than the amount required to cure the relevant financial covenant violation(s),
(B) all Curative Equity Contributions and the use of proceeds thereof will be disregarded for all other purposes under this Agreement,
(C) there shall be no more than two (2) Curative Equity Contributions during any fiscal year of Borrowers,
(D) there shall be no more than four (4) Curative Equity Contributions made in the aggregate after the Agreement Date,
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(E) no Curative Equity Contribution shall be permitted with respect to any fiscal quarter if a Curative Equity Contribution was made with respect to the immediately preceding fiscal quarter, and
(F) all Curative Equity Contributions will be applied to the Obligations.
(iii) Until timely receipt of the applicable Curative Equity Contribution, a Default shall be deemed to exist for all purposes under this Agreement. Upon timely receipt by Borrowers in cash of the applicable Curative Equity Contribution and the corresponding application to the Obligations (to the extent required by this Section 13(c)), the applicable Default(s) shall be deemed waived. Notwithstanding the foregoing, Agent shall not exercise any rights or remedies to the extent Agent has received a notice from Borrowers’ Agent and the Sponsor stating their irrevocable election and commitment to make a Curative Equity Contribution under this Section 13(c), until the date specified for such Curative Equity Contribution in such notice in accordance with this Section 13(c).
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foregoing, each Borrower represents and warrants that there has been no loan broker or investment banker involved in connection with the transactions contemplated hereby, and each Borrower agrees to indemnify and hold Agent and Lenders harmless from any claim of compensation payable to any loan broker or investment banker in connection with the transactions contemplated hereby. The foregoing to the contrary notwithstanding, Borrowers shall not have any obligation to any Indemnified Person under this section with respect to any indemnified liability resulting from the gross negligence or willful misconduct of such Indemnified Person or its advisors, officers, directors, employees, attorneys, or agents.
(c) Time of Essence. Time is of the essence of this Agreement.
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(f) Governing Law; Submission to Jurisdiction; Service; Etc. This Agreement and the other Loan Documents shall be governed by and construed in accordance with the substantive laws (other than conflict of law provisions and principles) of the State of Georgia. Each Borrower hereby consents to the non-exclusive jurisdiction of any United States Federal Court sitting in or with direct or indirect jurisdiction over the Northern District of Georgia or any Georgia state court sitting in Xxxx County, Georgia in any action, suit or other proceeding arising out of or relating to this Agreement or any of the other Loan Documents, and each Borrower irrevocably agrees that all claims and demands in respect of any such action, suit or proceeding may be heard and determined in any such court and irrevocably waives any objection it may now or hereafter have as to the venue of any such action, suit or proceeding brought in any such court or that such court is an inconvenient forum. Each Borrower waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to such Borrower at such Borrower’s address for notices pursuant to this Agreement, and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the United States mails. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Borrower or any of its Affiliates in the courts of any other jurisdiction. Any judicial proceeding commenced by a Borrower against Agent, any Lender or any other holder of any Obligations, or any Affiliate of Agent, any Lender or any other holder of any Obligations, involving, directly or indirectly, any matter in any way arising out of, related to or connected with any Loan Document shall be brought only in a United States Federal Court sitting in or with direct jurisdiction over the Northern District of Georgia or any Georgia state court sitting in Xxxx County, Georgia. Nothing in this Agreement shall be deemed or operate to affect the right of Agent or any Lender to serve legal process in any other manner permitted by law or to preclude the enforcement by Agent or any Lender of any judgment or order obtained in such forum or the taking of any action under this Agreement or any other Loan Document to enforce same in any other appropriate forum or jurisdiction.
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NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF. EACH OF BORROWERS, AGENT AND LENDERS ACKNOWLEDGES THAT SUCH WAIVER IS MADE WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE NATURE OF THE RIGHTS AND BENEFITS WAIVED HEREBY, AND WITH THE BENEFIT OF ADVICE OF COUNSEL OF ITS CHOOSING.
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exemplary or punitive damages (including any loss of profits, business or anticipated savings) in connection with this Agreement or any of the transactions contemplated hereby. Each Borrower hereby waives, releases and agrees not to xxx upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.
(k) Execution in Counterparts; Execution by Fax or E-Mail; Waiver of Acceptance. This Agreement may be executed in separate counterparts, all of which shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement or any other Loan Document by facsimile or e-mail shall be equally as effective as delivery of an original executed counterpart of this Agreement or such other Loan Document. Any party delivering an executed counterpart of this Agreement or any other Loan Document by facsimile or e-mail also shall deliver an original executed counterpart of this Agreement or such other Loan Document, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement or such other Loan Document. To the fullest extent permitted by applicable law, each Borrower waives notice of Agent’s and Lenders’ acceptance of this Agreement and the other Loan Documents.
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(e) Confirmation of Authority; Execution of Releases. Without in any manner limiting Agent’s authority to act without any specific or further authorization or consent by Lenders (as set forth in Section 16(a)), each Lender agrees to confirm in writing, upon request by Borrowers, the authority to release any property covered by this Agreement or the Loan Documents conferred upon Agent under Section 16(a). So long as no Event of Default is then continuing, upon receipt by Agent of confirmation from the requisite percentage of Lenders, of its authority to release any particular item or types of property covered by this Agreement or the Loan Documents, and upon at least five (5) Business Days prior written request by Borrowers, Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to Agent for the benefit of Lenders herein or pursuant hereto upon such Collateral; provided, however, that (i) Agent shall not be required to execute any such document on terms which, in Agent’s opinion, would expose Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon (or obligations of any Obligor, in respect of), all interests retained by any Obligor, including, without limitation, the proceeds of any sale, all of which shall continue to constitute part of the property covered by this Agreement or the Loan Documents.
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(i) the Letter of Credit Sub-Facility Amount minus the Letter of Credit Obligations, or
(ii) the amount, if any, by which the Borrowing Base exceeds the aggregate outstanding principal balance of revolving loans.
(d) Drawings Under Letters of Credit.
(i) Borrowers shall pay to Agent for the account of the issuing bank the amount of any drawing under any Letter of Credit on the date of such drawing. Borrowers hereby authorize Agent to make a revolving loan in the amount of such drawing, regardless of whether or not all conditions precedent to such revolving loan hereunder have been satisfied.
(ii) The obligation of Borrowers to repay any loans advanced pursuant to the foregoing clause (i) and any other amounts paid by Agent to any issuing bank with respect to any Letter of Credit shall be irrevocable, shall not be subject to any
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qualification or exception whatsoever and shall be binding in accordance with the terms and conditions of this Agreement under all circumstances, including the following circumstances: (A) any lack of validity or enforceability of this Agreement or any of the other Loan Documents; (B) the existence of any claim, set-off, defense or right which any Borrower or the account party may have at any time against the issuer of any Letter of Credit, a beneficiary of any Letter of Credit or any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), Agent, any Lender or any other Person, whether in connection with this Agreement, or any Letter of Credit, the transactions contemplated herein or any unrelated transactions; (C) any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (D) the surrender or impairment of any security for the performance or observance of any of the terms of this Agreement or the other Loan Documents; (E) any failure of Agent or any Letter of Credit issuer to provide notice to any Borrower of any drawing under any Letter of Credit; (F) the occurrence or continuance of any Default; or (G) any other reason.
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IN WITNESS WHEREOF, Borrowers, Agent and Lenders have executed this Loan and Security Agreement as of the day and year first above written.
| BORROWERS: | ||
| LIGHTING SCIENCE GROUP CORPORATION | ||
| By: | /s/ Xxxxxx X. Xxxxxxx | |
| Name: Xxxxxx X. Xxxxxxx | ||
| Title: Chief Financial Officer |
| BIOLOGICAL ILLUMINATION, LLC | ||
| By: | /s/ Xxxx Xxxxx | |
| Name: Xxxx Xxxxx | ||
| Title: Manager |
| AGENT AND SOLE LENDER: | ||
| FCC, LLC, d/b/a FIRST CAPITAL | ||
| By: | /s/ Xxxxx Xxxxxxx | |
| Name: Xxxxx Xxxxxxx | ||
| Title: Senior Vice President |