EXHIBIT 10
CREDIT AGREEMENT
Dated as of August 28, 1995
between
TRANS-LUX CORPORATION
TRANS-LUX CONSULTING CORPORATION
TRANS-LUX SIGN CORPORATION
TRANS-LUX MONTEZUMA CORPORATION
and
INTEGRATED SYSTEMS ENGINEERING, INC.
as Borrowers
and
FIRST FIDELITY BANK
as Lender
TABLE OF CONTENTS
Page
1. AMOUNT AND TERMS OF CREDIT FACILITIES . . . . . . . . . 1
1.01 Loans. . . . . . . . . . . . . . . . . . . . . . 1
1.02 Repayment; Prepayment. . . . . . . . . . . . . . 1
1.03 Use of Proceeds. . . . . . . . . . . . . . . . . 2
1.04 Interest on Loans. . . . . . . . . . . . . . . . 2
1.05 Fees . . . . . . . . . . . . . . . . . . . . . . 3
1.06 Receipt of Payments. . . . . . . . . . . . . . . 3
1.07 Application and Allocation of
Payments . . . . . . . . . . . . . . . . . . . 3
1.08 Accounting . . . . . . . . . . . . . . . . . . . 3
1.09 Indemnity. . . . . . . . . . . . . . . . . . . . 4
1.10 Access . . . . . . . . . . . . . . . . . . . . . 4
1.11 Taxes. . . . . . . . . . . . . . . . . . . . . . 5
1.12 Capital Adequacy . . . . . . . . . . . . . . . . 6
1.13 Current Outstanding Indebtedness . . . . . . . . 7
1.14 Replacement Real Estate Collateral . . . . . . . 7
2. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . 7
3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . 8
3.01 Corporate Existence; Compliance with
Law. . . . . . . . . . . . . . . . . . . . . . 8
3.02 Executive Offices; Corporate or
Other Names. . . . . . . . . . . . . . . . . . 9
3.03 Corporate Power; Authorization;
Enforceable Obligations. . . . . . . . . . . . 9
3.04 Financial Statements and
Projections. . . . . . . . . . . . . . . . . . 9
3.05 Material Adverse Change. . . . . . . . . . . . . 9
3.06 Ownership of Property; Liens . . . . . . . . . . 10
3.07 Restrictions; No Default; Material
Contracts. . . . . . . . . . . . . . . . . . . 10
3.08 Labor Matters. . . . . . . . . . . . . . . . . . 11
3.09 Ventures, Subsidiaries and
Affiliates; Outstanding Stock and
Indebtedness . . . . . . . . . . . . . . . . . 11
3.10 Government Regulation. . . . . . . . . . . . . . 11
3.11 Margin Regulations . . . . . . . . . . . . . . . 11
3.12 Taxes. . . . . . . . . . . . . . . . . . . . . . 12
3.13 ERISA. . . . . . . . . . . . . . . . . . . . . . 12
3.14 No Litigation. . . . . . . . . . . . . . . . . . 14
3.15 Brokers. . . . . . . . . . . . . . . . . . . . . 14
3.16 Patents, Trademarks, Copyrights and
Licenses . . . . . . . . . . . . . . . . . . . 14
3.17 Full Disclosure. . . . . . . . . . . . . . . . . 14
3.18 Hazardous Materials. . . . . . . . . . . . . . . 15
3.19 Insurance Policies . . . . . . . . . . . . . . . 15
3.20 Deposit and Disbursement Accounts. . . . . . . . 15
3.21 Solvency . . . . . . . . . . . . . . . . . . . . 15
4. FINANCIAL STATEMENTS AND INFORMATION. . . . . . . . . . 15
4.01 Reports and Notices. . . . . . . . . . . . . . . 15
4.02 Communication with Accountants . . . . . . . . . 15
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . 16
5.01 Maintenance of Existence and Conduct
of Business. . . . . . . . . . . . . . . . . . 16
5.02 Payment of Charges and Claims. . . . . . . . . . 16
5.03 Books and Records. . . . . . . . . . . . . . . . 17
5.04 Litigation . . . . . . . . . . . . . . . . . . . 17
5.05 Insurance. . . . . . . . . . . . . . . . . . . . 17
5.06 Compliance with Laws . . . . . . . . . . . . . . 18
5.07 Agreements . . . . . . . . . . . . . . . . . . . 18
5.08 Supplemental Disclosure. . . . . . . . . . . . . 18
5.09 Environmental Matters. . . . . . . . . . . . . . 18
5.10 Landlord's Agreements. . . . . . . . . . . . . . 19
5.11 Certain Obligations Respecting
Subsidiaries . . . . . . . . . . . . . . . . . 19
5.12 Application of Proceeds. . . . . . . . . . . . . 19
5.13 Fiscal Year. . . . . . . . . . . . . . . . . . . 19
5.14 Casualty and Condemnation. . . . . . . . . . . . 19
5.15 Closing Fee. . . . . . . . . . . . . . . . . . . 20
5.16 Material Subsidiaries. . . . . . . . . . . . . . 20
5.17 Further Assurances.. . . . . . . . . . . . . . . 20
6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 21
6.01 Mergers, Subsidiaries, Etc.. . . . . . . . . . . 21
6.02 Investments. . . . . . . . . . . . . . . . . . . 21
6.03 Indebtedness . . . . . . . . . . . . . . . . . . 21
6.04 Employee Loans and Transactions;
Employment Agreements. . . . . . . . . . . . . 21
6.05 Capital Structure and Business . . . . . . . . . 22
6.06 Guaranteed Indebtedness. . . . . . . . . . . . . 22
6.07 Liens. . . . . . . . . . . . . . . . . . . . . . 22
6.08 Sale of Assets . . . . . . . . . . . . . . . . . 23
6.09 Material Contracts . . . . . . . . . . . . . . . 23
6.10 ERISA. . . . . . . . . . . . . . . . . . . . . . 23
6.11 Financial Covenants. . . . . . . . . . . . . . . 23
6.12 Hazardous Materials. . . . . . . . . . . . . . . 23
6.13 Sale-Leasebacks. . . . . . . . . . . . . . . . . 23
6.14 Cancellation of Indebtedness . . . . . . . . . . 24
6.15 Restricted Payments. . . . . . . . . . . . . . . 24
6.16 Real Property Leases . . . . . . . . . . . . . . 24
6.17 Bank Accounts. . . . . . . . . . . . . . . . . . 24
6.18 No Speculative Transactions. . . . . . . . . . . 24
6.19 Margin Regulations . . . . . . . . . . . . . . . 24
6.20 Limitation on Negative Pledge
Clauses. . . . . . . . . . . . . . . . . . . . 24
6.21 Accounting Changes . . . . . . . . . . . . . . . 24
7. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.01 Duration . . . . . . . . . . . . . . . . . . . . 25
7.02 Survival of Obligations. . . . . . . . . . . . . 25
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES . . . . . . . . 25
8.01 Events of Default. . . . . . . . . . . . . . . . 25
8.02 Remedies . . . . . . . . . . . . . . . . . . . . 27
8.03 Waivers by Borrowers . . . . . . . . . . . . . . 27
9. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . 28
9.01 Successors and Assigns . . . . . . . . . . . . . 28
9.02 Assignments and Participations . . . . . . . . . 28
10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 29
10.01 Complete Agreement; Modification of
Agreement. . . . . . . . . . . . . . . . . . . 29
10.02 Fees and Expenses. . . . . . . . . . . . . . . . 29
10.03 No Waiver. . . . . . . . . . . . . . . . . . . . 30
10.04 Remedies . . . . . . . . . . . . . . . . . . . . 30
10.05 Severability . . . . . . . . . . . . . . . . . . 30
10.06 Conflict of Terms. . . . . . . . . . . . . . . . 30
10.07 Right of Set-off . . . . . . . . . . . . . . . . 30
10.08 Authorized Signature . . . . . . . . . . . . . . 30
10.09 GOVERNING LAW. . . . . . . . . . . . . . . . . . 31
10.10 Notices. . . . . . . . . . . . . . . . . . . . . 31
10.11 Section Titles . . . . . . . . . . . . . . . . . 33
10.12 Counterparts . . . . . . . . . . . . . . . . . . 33
10.13 Time of the Essence. . . . . . . . . . . . . . . 33
10.14 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . 33
10.15 PREJUDGMENT REMEDY WAIVER. . . . . . . . . . . . 34
INDEX OF ANNEXES, SCHEDULES AND EXHIBITS
Annex A - Definitions
Annex B - Schedule of Closing Documents
Annex C - Schedule of Certain Fees
Annex D - Financial Statements,
Projections and Notices
Annex E - Insurance Requirements
Schedule 1.1 - Loans
Schedule 1.2 - Repayment of Loans
Schedule 1.3 - Use of Proceeds
Schedule 3.2 - Executive Offices; Trade Names
Schedule 3.4 - Financial Statements and
Projections
Schedule 3.5 - Dividends
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Material Contracts
Schedule 3.8 - Labor Matters
Schedule 3.9 - Ventures, Subsidiaries and
Affiliates; Outstanding
Stock
Schedule 3.12 - Tax Matters
Schedule 3.13 - ERISA Plans
Schedule 3.14 - Litigation
Schedule 3.16 - Patents, Trademarks,
Copyrights and Licenses
Schedule 3.18 - Hazardous Materials
Schedule 3.19 - Insurance Policies
Schedule 3.20 - Disbursement and Deposit
Accounts
Schedule 6.2 - Investments
Schedule 6.3 - Indebtedness
Schedule 6.4 - Loans to and Transactions
with Employees
Schedule 6.7 - Liens
Schedule 6.11 - Financial Covenants
Schedule 10.8 - Authorized Signatures
Exhibit A - Form of Notes
Exhibit B - Form of Unlimited Guaranty
Exhibit C - Form of Security Agreement
Exhibit D - Form of Notice of Revolving Credit Advance
Exhibit E - Form of Swap Agreement
CREDIT AGREEMENT
AGREEMENT, dated as of August 28, 1995, among
TRANS-LUX CORPORATION, a Delaware corporation,
TRANS-LUX CONSULTING CORPORATION, a Delaware
corporation, TRANS-LUX SIGN CORPORATION, a Delaware
corporation, TRANS-LUX MONTEZUMA CORPORATION, a New
Mexico corporation, INTEGRATED SYSTEMS ENGINEERING,
INC., a Utah corporation, and FIRST FIDELITY BANK, a
Connecticut banking corporation.
Background
A. One or more of the Borrowers has requested
that the Lender extend certain loans to one or more
of the Borrowers upon the terms and conditions set
forth herein.
B. Capitalized terms used herein shall have
the meanings ascribed to them on Annex A. All
Schedules, Annexes, Attachments and Exhibits hereto,
or expressly identified to this Agreement, are
incorporated herein by reference, and taken
together, shall constitute but a single agreement.
Unless otherwise expressly set forth herein, or in a
written amendment referring to such Schedules and
Annexes, all Schedules and Annexes referred to
herein shall mean the Schedules as in effect at the
Closing Date. As used herein, the plural shall
include the singular, the singular includes the
plural, and pronouns in any gender (masculine,
feminine or neuter) all apply to all genders. The
recitals contained in this Background shall be
construed as part of this Agreement.
Agreement
In consideration of the Background and the
mutual covenants contained herein, the parties
hereto, intending to be bound legally, agree as
follows:
1. AMOUNT AND TERMS OF CREDIT FACILITIES
1.01 Loans. Subject to the terms and
conditions on Schedule 1.1, Lender agrees to make
the Loans to one or more of the Borrowers on the
Closing Date.
1.02 Repayment; Prepayment.
(a) Borrowers shall repay the
indebtedness of the Loans in accordance with the
provisions of Schedule 1.2.
(b) Borrowers shall have the right at any
time to satisfy the indebtedness of the Notes, in
whole or in part.
(c) TLX shall maintain an account
continuously with Lender until the Obligations are
paid in full. At Borrower's option and subject to
the provisions of subsection (e) of Schedule 1.2,
Lender may debit such account (or any other account
maintained by any Borrower with Lender) for the
amount of any payment as and when such payment
becomes due hereunder. The foregoing shall not
affect Borrower's obligations to pay when due all
accounts payable hereunder, whether or not there are
sufficient funds in any accounts of Borrowers. The
foregoing rights of Lender to debit any Borrower's
account shall be in addition to, and not in
limitation of, any right of set-off which Lender
and/or any of its Affiliates may have hereunder or
under the Loan Documents and Borrowers agree that
the rights hereunder shall not limit Lender's
recourse to any particular source of fund or moneys.
1.03 Use of Proceeds. Borrowers shall use the
proceeds of the Loans for the purposes set forth on
the attached Schedule 1.3.
1.04 Interest on Loans.
(a) Borrowers shall pay interest on the
indebtedness of the Loans in accordance with the
terms and conditions set forth on Schedule 1.2.
(b) Upon the occurrence and during the
continuance of any Event of Default, upon Lender's
contemporaneous written notice to Borrower, the
interest rate applicable to all of the Obligations,
including, without limitation, the Loans, shall be
increased, effective as of the date of the Default
giving rise to such Event of Default, to the Default
Rate; provided, however, that upon the occurrence of
an Event of Default specified in Sections 8.01(f),
(g) or (h), the interest rate applicable to all of
the Obligations shall be increased automatically to
the Default Rate without the necessity of any action
on the part of Lender. Notwithstanding the
foregoing, Borrower's agree that Lender's failure to
give the foregoing notice shall not affect Lender's
right to impose the Default Rate upon the occurrence
and continuance of an Event of Default.
(c) Notwithstanding anything to the
contrary set forth in this Section 1.04, if, at any
time until payment in full of all of the
Obligations, the rate of interest payable hereunder
exceeds the highest rate of interest permissible
under any law which a court of competent
jurisdiction shall, in a final determination, deem
applicable hereto (the "Maximum Lawful Rate"), then
in such event and so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate;
provided, however, that if at any time thereafter
the rate of interest payable hereunder is less than
the Maximum Lawful Rate, Borrowers shall continue to
pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by
Lender is equal to the total interest which such
Lender would have received had the interest rate
payable hereunder been (but for the operation of
this subsection) the interest rate payable since the
Closing Date as otherwise provided in this
Agreement. Thereafter, the interest rate payable
hereunder shall be the rate of interest provided in
Section 1.04 (a) and (b) of this Agreement, unless
and until the rate of interest again exceeds the
Maximum Lawful Rate, in which event this subsection
shall again apply. In no event shall the total
interest received by Lender pursuant to the terms
hereof exceed the amount which Lender could lawfully
have received had the interest due hereunder been
calculated for the full term hereof at the Maximum
Lawful Rate. In the event the Maximum Lawful Rate
is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal
to the Maximum Lawful Rate divided by the number of
days in the year in which such calculation is made.
In the event that a court of competent jurisdiction,
notwithstanding the provisions of this Section
1.04(c), shall make a final determination that
Lender has received interest hereunder or under any
of the Loan Documents in excess of the Maximum
Lawful Rate, such Lender shall, to the extent
permitted by applicable law, promptly apply such
excess first to any lawful interest due and not yet
paid hereunder, then to the outstanding principal of
the Obligations, then to Fees and any other unpaid
Obligations and thereafter shall refund any excess
to Borrowers or as a court of competent jurisdiction
may otherwise order.
1.05 Fees. As compensation for Lender's costs,
skills, services and efforts incurred and expended
in making the Loans available to Borrowers,
Borrowers agree to pay to Lender the Fees set forth
in Annex C.
1.06 Receipt of Payments. Borrowers shall make
each payment under this Agreement not later than
2:00 p.m. (New York City time) on the day when due
in lawful money of the United States of America in
immediately available funds. For purposes of
computing interest and Fees (a) all payments
consisting of cash, wire, or electronic transfers in
immediately available funds shall be deemed received
by Lender upon receipt and (b) all payments
consisting of checks, drafts, or similar non-cash
items shall be deemed received upon receipt of good
funds following deposit by Lender.
1.07 Application and Allocation of Payments.
Any and all payments at any time or times hereafter
received from or on behalf of Borrowers shall be
applied in the following order: (i) then due and
payable Fees, expenses and other Obligations; (ii)
then due and payable interest payments on the Loans;
(iii) Obligations to Lender then due and payable
other than Fees, expenses and interest and principal
payments; and (iv) then due and payable principal
payments on the Loans in order of maturity. Lender
is authorized to, and at its option may, make or
cause to be made expenditures by Lender on behalf of
Borrowers for payment of all Fees, expenses,
charges, costs, principal, interest, or other
Obligations then due and payable by Borrowers under
this Agreement or any of the Loan Documents with
respect to the Loans, and Borrowers agree that the
making of any such expenditure shall be deemed a
borrowing under Loan C and shall constitute an
automatic Default entitling Lender to exercise all
rights and remedies available under this Agreement,
any other Loan Document or applicable law.
Notwithstanding the foregoing, with respect to
principal and interest payments under Loan A and
Loan B, it shall not be deemed a borrowing under
Loan C until five days after the due date for such
payments.
1.08 Accounting. Lender will provide a monthly
accounting of transactions under the Loans to
Borrowers. Each and every such accounting shall
(absent manifest error) be deemed final, binding and
conclusive upon Borrowers in all respects as to all
matters reflected therein, unless Borrowers, within
30 days after the date any such accounting is
rendered, shall notify Lender in writing of any
objection which Borrowers may have to any such
accounting, describing the basis for such objection
with specificity. In that event, only those items
(the "disputed items") expressly objected to in such
notice shall be deemed to be disputed by Borrowers.
Lender's determination, based upon the facts
available, of any disputed item shall (absent
manifest error) be final, binding and conclusive on
Borrowers.
1.09 Indemnity.
(a) Borrowers shall indemnify, jointly
and severally and hold Lender and its Affiliates,
officers, directors, employees, attorneys and agents
(each, an "Indemnified Person"), harmless from and
against any and all suits, actions, costs, fines,
deficiencies, penalties, proceedings, claims,
damages, losses, liabilities and expenses (including
reasonable attorneys' fees, disbursements and court
costs and other costs of investigations or defense,
including those incurred upon any appeal) (each, a
"Claim") which may be instituted or asserted against
or incurred by such Indemnified Person as the result
of credit having been extended under this Agreement
or any other Loan Document or in connection with or
arising out of the transactions contemplated
hereunder and thereunder, including any and all
Environmental Liabilities and Costs, provided, that
Borrowers shall not be liable for any indemni-
fication to such Indemnified Person with respect to
any portion of any such Claim which results solely
from such Indemnified Person's gross negligence or
willful misconduct as determined by a final judgment
of a court of competent jurisdiction. NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO
ANY OTHER PARTY HERETO, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH
PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED UNDER THE LOAN
DOCUMENTS.
In any suit proceeding or action brought by Lender
relating to any Account, Chattel Paper, Contract,
General Intangible, Instrument, Equipment or
Document for any sum owing thereunder, or to enforce
any provision of any Account, Chattel Paper,
Contract, General Intangible, Instrument or
Document, Borrowers shall, jointly and severally,
save, indemnify and keep each Indemnified Person
harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability
whatsoever of the obligor thereunder arising out of
a breach by Borrowers of any obligation thereunder
or arising out of any other agreement, indebtedness
or liability at any time owing to, or in favor of,
such obligor or its successors from Borrowers, all
such obligations of Borrowers shall be and remain
enforceable against, and only against, Borrowers and
shall not be enforceable against any Indemnified
Person.
(b) Borrowers hereby acknowledge and
agree that Lender (as of the date hereof) (i) is not
now and has not ever been in control of any of the
Subject Property or the affairs of any of the
Borrowers, and (ii) does not have the capacity
through the provisions of the Loan Documents to
influence conduct with respect to the ownership,
operation or management of any of the Subject
Property.
1.10 Access. (a) Borrowers shall, and shall
cause each of its Subsidiaries to: (i) provide
access during normal business hours to Lender and
any of its officers, employees and agents, as
frequently as Lender determines to be appropriate,
upon advance notice of two calendar days, to the
extent practicable (unless a Default shall have
occurred and be continuing, in which event no notice
shall be required and Lender shall have access at
any and all times), to the properties and facilities
of Borrowers or any of its Subsidiaries; (ii) permit
Lender and any of its officers, employees and agents
to inspect, audit and make extracts from any of
Borrowers' records, files and books of account; and
(iii) permit on behalf of Lender, to conduct audits
to inspect, review and evaluate the Collateral, and
Borrower agree to render to Lender at Borrowers'
cost and expense, such clerical and other assistance
as may be reasonably requested with regard thereto.
Borrowers shall, and shall cause each of their
Subsidiaries to, make available to Lender and its
counsel, as quickly as practicable under the
circumstances, originals or copies of all books,
records, board minutes, contracts, insurance
policies, environmental audits, business plans,
files, financial statements (actual and pro forma),
filings with federal, state and local regulatory
agencies, and other instruments and documents which
Lender may reasonably request. Borrowers shall
deliver any document or instrument reasonably
necessary for Lender, as it may from time to time
request, to obtain records from any service bureau
or other Person which maintains records for
Borrowers. Borrowers shall instruct their certified
public accountants and its banking and other
financial institutions to make available to Lender
such information and records as Lender may
reasonably request and, absent the occurrence and
continuance of an Event of Default, Lender agrees to
endeavor to give prior notice of such request to
Borrowers.
(b) With respect to the audits to be
conducted by Lender, Borrowers agree that during the
occurrence and continuance of an Event of Default,
the costs of such shall be borne by Borrowers and
that (i) Lender shall have the right, prior to a
Default, to conduct one audit during each calendar
year, (ii) there shall be no limit (other than one
of reasonableness) to the number of audits that
Lender may conduct subsequent to a Default and the
continuation thereof, and (iii) there shall be no
limit on the cost of any audit conducted by Lender
subsequent to the occurrence and continuation of a
Default.
1.11 Taxes.
(a) Any and all payments by or on behalf
of Borrowers hereunder or under the Notes, or any
other Loan Document, shall be made, in accordance
with this Section 1.11, free and clear of, and
without deduction for any and all present or future
Taxes. If Borrowers shall be required by law to
deduct any Taxes from or in respect of any sum
payable hereunder or under the Notes or any other
Loan Document to Lender, (i) the sum payable shall
be increased as may be necessary so that after
making all required deductions (including deductions
applicable to additional sums payable under this
Section 1.11), Lender receives an amount equal to
the sum it would have received had no such
deductions been made, (ii) Borrowers shall make such
deductions, and (iii) Borrowers shall pay the full
amount deducted to the relevant taxing or other
authority in accordance with applicable law.
(b) In addition, Borrowers agree to pay
any present or future stamp or documentary taxes or
any other excise or property taxes, charges or
similar levies that arise from any payment made
hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other
Taxes").
(c) Borrowers shall indemnify and pay,
within 10 days of demand therefor, Lender for the
full amount of Taxes or Other Taxes (including
without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this
Section 1.11) paid by Lender and any liability
(including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally
asserted.
(d) Within 30 days after the date of any
such payment of Taxes or Other Taxes, Borrowers
shall furnish to Lender, at its address referred to
in Section 10.10, the original or a certified copy
of a receipt evidencing payment thereof.
(e) If Lender subsequently receives from
a taxing authority a refund of any Tax or Other Tax
previously paid by any Borrower and for which
Borrowers have indemnified Lender pursuant to this
Section 1.11, Lender shall within 30 days after
receipt of such refund, and to the extent permitted
by applicable law, pay to Borrowers the net amount
of any such refund after deducting taxes and
expenses attributable thereto.
1.12 Capital Adequacy.
(a) Borrowers shall pay directly to
Lender from time to time on request within 30 days
after receiving the certificates referred in
subsection (b) below, such amounts as Lender may
reasonably determine to be necessary to compensate
Lender for any costs that it reasonably determines
are attributable to the maintenance by Lender,
pursuant to any law or regulation or any
interpretation, directive or request of any court or
governmental or monetary authority (i) following any
Regulatory Change or (ii) implementing after the
date hereof any risk-based capital guideline or
other capital requirement heretofore or hereafter
issued by any Governmental Authority in respect of
the Loans (such compensation to include, without
limitation, an amount equal to any reduction of the
rate of return on assets or equity of Lender to a
level below that Lender could have achieved but for
such law, regulation, interpretation, directive or
request) unless such Regulatory Change or other
requirement is declared invalid.
(b) Lender shall, as promptly as
practicable, notify Borrowers of any event occurring
after the date of this Agreement entitling Lender to
compensation under this Section 1.12 but in any
event within 45 days, after Lender obtains actual
knowledge thereof; provided that if Lender fails to
give such notice within 45 days after it obtains
actual knowledge of such an event, Lender shall,
with respect to compensation payable pursuant to
this Section 1.12 in respect of any costs resulting
from such event, only be entitled to payment under
this Section 1.12 for costs incurred from and after
the date 45 days prior to the date that Lender does
give such notice. Lender will furnish to Borrowers
a certificate setting forth the basis and amount of
each request by Lender for compensation under this
Section 1.12. Determinations and allocations by
Lender for purposes of this Section 1.12 of the
effect of any Regulatory Change pursuant to or of
capital maintained pursuant to this Section 1.12, on
its costs or rate of return of extending the Loans,
and of the amounts required to compensate Lender
under this Section 1.12, shall be conclusive absent
manifest error.
1.13 Current Outstanding Indebtedness.
Borrowers acknowledge that the Loans represent
current existing Indebtedness to Lender and that
such Indebtedness shall continue to be secured by
the Collateral and the Borrowers acknowledge and
agree that such Collateral remains subject to a
security interest to secure the Indebtedness of the
Loans and the other Obligations of the Borrowers re-
evidenced by this Agreement.
This Agreement is given as a substitution of,
and not as payment of, the current existing
Indebtedness of Borrowers to Lender and is not
intended to constitute a novation of the agreements
evidencing such Indebtedness.
1.14 Replacement Real Estate Collateral.
Borrowers shall have the right to request from time
to time a release of Lender's lien or mortgage
encumbering one or more of the parcels of real
property owned by one of the Borrowers to secure the
indebtedness of the Notes or the Guaranties if,
after giving effect to the proposed release, (a) no
Default then exists or would exist, (b) the ratio of
the then outstanding balance of the indebtedness of
Note A to the aggregate appraised value of all such
proposed remaining parcels of real property and any
unencumbered assets of Borrowers which Borrowers
propose to mortgage, or grant a security interest
in, to Lender is not less than 0.70 to 1.00. In
connection with any such proposed release, Lender
shall have the right, in its sole discretion, to
obtain appraisals for such parcels of real property
or valuations of personal property and Borrowers
agree that they shall be responsible to pay the
costs of such appraisals and valuations.
2. CONDITIONS PRECEDENT
Conditions to the Funding of the Loans.
Notwithstanding any other provision of this
Agreement and without affecting in any manner the
rights of Lender hereunder, Borrowers shall have no
rights under this Agreement (but shall have all
applicable obligations hereunder), and Lender shall
not be obligated to fund the Loans, or to take,
fulfill, or perform any other action hereunder,
until the following conditions have been fulfilled
to the satisfaction of Lender:
(a) This Agreement or counterparts
thereof shall have been duly executed by, and
delivered to, Borrowers and Lender.
(b) Lender shall have received such
documents, instruments, certificates, opinions and
agreements as Lender shall request in connection
with the transactions contemplated by this
Agreement, including all documents, instruments,
agreements and other materials listed in the
Schedule of Documents each in form and substance
satisfactory to Lender.
(c) Evidence satisfactory to Lender that
Borrowers have obtained consents and acknowledgments
of all Persons whose consents and acknowledgments
may be required by Borrowers, to the terms and to
the execution and delivery, of this Agreement and
the other Loan Documents and the consummation of the
transactions contemplated hereby and thereby.
(d) Evidence satisfactory to Lender that
the insurance policies provided for in Section 3.19
and Annex E are in full force and effect, together
with appropriate evidence showing a loss payable
and/or additional insured clauses or endorsements,
as appropriate, in favor of Lender and in form and
substance satisfactory to Lender.
(e) Payment by Borrowers to Lender of all
reasonable Fees, costs, and expenses of closing
(including fees and expenses of consultants and
counsel to Lender).
(f) No action, proceeding, investigation,
regulation or legislation shall have been
instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of
this Agreement or any of the other Loan Documents or
the consummation of the transactions contemplated
hereby and thereby and which, in Lender's sole
judgment, would make it inadvisable to consummate
the transactions contemplated by this Agreement or
any of the other Loan Documents.
(g) Lender, in its sole judgment, shall
have determined that (i) Borrowers shall not have
made any Restricted Payment and (ii) no material
increase in liabilities, liquidated or contingent,
of Borrowers, or material decrease in the assets of
Borrowers, shall have occurred since June 30, 1995,
(iii) no Material Adverse Effect shall have occurred
since June 30, 1995.
3. REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement,
Borrowers represent and warrant, jointly and
severally, to Lender (for itself and each Subsidiary
and Affiliate) that:
3.01 Corporate Existence; Compliance with Law.
Each Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws
of the jurisdiction of its incorporation and is duly
qualified to do business and is in good standing in
each other jurisdiction where its ownership or lease
of property or the conduct of its business requires
such qualification except where the failure to so
qualify would not have a Material Adverse Effect on
Borrowers' collective ability to comply with their
obligations under this Agreement; (ii) has the
requisite corporate authority and the legal right to
own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it
operates under lease, and to conduct its business as
now, heretofore and proposed to be conducted; (iii)
has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has
given all notices to, all Governmental Authorities
having jurisdiction, to the extent required for such
ownership, operation and conduct where the failure
to do so would singly or in the aggregate have a
Material Adverse Effect upon the business assets,
liabilities, financial condition or results of
operation or business prospects of Borrowers on a
consolidated basis; (iv) is in compliance with its
certificate or articles of incorporation and
by-laws; and (v) is in compliance in all material
respects with all applicable provisions of law.
3.02 Executive Offices; Corporate or Other
Names. The current locations of each Borrower's
chief executive office and principal place of
business is set forth in Schedule 3.2, and, except
as set forth on Schedule 3.2, such location has not
changed during the preceding twelve months. During
the prior five years, except as set forth on
Schedule 3.2, none of the Borrowers has been known
as or used any corporate, fictitious or trade name.
3.03 Corporate Power; Authorization;
Enforceable Obligations. The execution, delivery
and performance by Borrowers of the Loan Documents
and all other instruments and documents to be
delivered by Borrowers hereunder and thereunder to
the extent it is a party thereto and the creation of
all Liens provided for herein and therein: (i) are
within each Borrower's corporate power; (ii) have
been duly authorized by all necessary corporate and
shareholder action; (iii) are not in contravention
of any provision of each Borrower's certificate or
articles of incorporation or by-laws or other
organizational documents; (iv) will not violate any
law or regulation, or any order or decree of any
court or governmental instrumentality applicable to
any Borrower; (v) will not conflict with or result
in the breach or termination of, constitute a
default under or accelerate any performance required
by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which Borrowers are
a party or by which Borrowers or any of their
property is bound; (vi) will not result in the
creation or imposition of any Lien upon any of the
property of Borrowers other than those in favor of
Lender, all pursuant to the Loan Documents; and
(vii) do not require Borrowers to obtain the consent
or approval of any Governmental Authority or any
other Person, except those referred to in Section
2.01(c), all of which will have been duly obtained,
made or complied with prior to the Closing Date and
which are in full force and effect. At or prior to
the Closing Date, each of the Loan Documents shall
have been duly executed and delivered for the
benefit of or on behalf of Borrowers and each shall
then constitute a legal, valid and binding
obligation of Borrowers, enforceable against
Borrowers in accordance with its terms.
3.04 Financial Statements and Projections.
Borrowers have delivered the financial statements
and Projections identified on Schedule 3.4, and each
such financial statement and Projection complies in
all material respects with the description thereof
contained on Schedule 3.4.
3.05 Material Adverse Change. As of the date
hereof, none of the Borrowers has material
obligations, contingent liabilities, or liabilities
for Charges, long-term leases or unusual forward or
long-term commitments required to be reflected which
are not reflected in the unaudited June 30, 1995,
consolidated balance sheet of Borrowers and their
Subsidiaries. As of the date hereof, to Borrowers'
knowledge, there has been no material deviation from
the Projections provided to Lender. Except as
otherwise permitted hereunder or as set forth on
Schedule 3.5, no dividends, advances or other
distributions have been declared, paid or made upon
any Stock of Borrowers and, since June 30, 1995, no
shares of Stock of Borrowers have been, or are now
required to be, redeemed, retired, purchased or
otherwise acquired for value by Borrowers. Since
June 30, 1995, except as disclosed in the unaudited
financial statements of Borrowers for the period
ending June 30, 1995, no event has occurred which
would result in a Material Adverse Effect.
3.06 Ownership of Property; Liens. Except as
described on Schedule 3.6, the real estate listed on
Schedule 3.6 constitutes all of the real property
owned, leased, or used in their business by
Borrowers. Borrowers hold (i) good and marketable
fee simple title to all of the owned real estate
described on Schedule 3.6, (ii) except for
Borrowers' lease of office space utilized in
Borrowers' business valid and marketable leasehold
interests in all of Borrowers' Leases (both as
lessor and lessee, sublessee or assignee) described
on Schedule 3.6, and (iii) good and marketable title
to, or valid leasehold interests in, all of its
other properties and assets. None of the properties
and assets of Borrowers are subject to any Liens,
except (x) Permitted Encumbrances, (y) Liens set
forth on Schedule 6.7 and (z) from and after the
Closing Date, the Liens in favor of Lender pursuant
to the Collateral Documents. Borrowers have
received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar
agreements, bills of sale and other documents, and
duly effected all recordings, filings and other
actions necessary to establish, protect and perfect
Borrowers' right, title and interest in and to all
such real estate and other assets or property.
Except as described on Schedule 3.6, (i) to
Borrowers' knowledge, no party to any such Lease
described on Schedule 3.6 is in default of its
obligations thereunder or has delivered or received
any notice of default under any such Lease, and no
event has occurred which, with the giving of notice,
the passage of time, or both, would constitute a
default under any such Lease; Borrowers do not own
or hold, and are not obligated under or a party to,
any option, right of first refusal or any other
contractual right to purchase, acquire, sell, assign
or dispose of any real property owned or leased by
Borrowers except as set forth on Schedule 3.6; and
(iii) no portion of any real property owned or
leased by Borrowers has suffered any material damage
by fire or other casualty loss which has not
heretofore been repaired and restored to useful
operating condition. To Borrowers' knowledge, all
material permits required to have been issued or
appropriate to enable the real property owned or
leased by Borrowers to be lawfully occupied and used
for all of the purposes for which they are currently
occupied and used, have been lawfully issued and
are, as of the date hereof, in full force and
effect.
3.07 Restrictions; No Default; Material
Contracts. No contract, lease, agreement or other
instrument to which any of the Borrowers is a party
or by which any of them or any of their properties
or assets is bound or affected and no provision of
any charter, corporate restriction, applicable law
or governmental regulation has resulted in a
Material Adverse Effect. None of the Borrowers is
in default and, to Borrowers' knowledge, no third
party is in default, under or with respect to any
material contract, agreement, lease or other
instrument to which any of the Borrowers is a party.
No Default has occurred and is continuing. Schedule
3.7, as supplemented from time to time, at Lender's
request, by written disclosures to the Lender, sets
forth a complete and accurate list of all Material
Contracts of Borrowers.
3.08 Labor Matters. Except as set forth on
Schedule 3.8, there are no strikes or other labor
disputes against Borrowers that are pending or, to
Borrowers' knowledge, threatened. Hours worked by
and payment made to employees of Borrowers are not
in violation of the Fair Labor Standards Act or any
other applicable law dealing with such matters which
would have a Material Adverse Effect. All material
payments due from Borrowers on account of employee
health and welfare insurance have been paid or
accrued where required as a liability on the books
of Borrowers. Except as set forth on Schedule 3.8,
Borrowers have no obligation under any collective
bargaining agreement, management agreement, or any
employment agreement, and a correct and complete
copy of each agreement listed on Schedule 3.8 has
been provided to Lender. There is no organizing
activity involving Borrowers pending or, to
Borrowers' knowledge, threatened by any labor union
or group of employees. Except as set forth on
Schedule 3.14, there are no representation
proceedings pending or, to Borrowers' knowledge,
threatened with the National Labor Relations Board,
and no labor organization or group of employees of
any of the Borrowers has made a pending demand for
recognition, and, there are no complaints or charges
against any of the Borrowers pending or threatened
to be filed with any federal, state, local or
foreign court, governmental agency or arbitrator
based on, arising out of, in connection with, or
otherwise relating to the employment or termination
of employment by any of the Borrowers of any
individual.
3.09 Ventures, Subsidiaries and Affiliates;
Outstanding Stock and Indebtedness. Except as set
forth on Schedule 3.9, Borrowers have no
Subsidiaries, are not engaged in any joint venture
or partnership with any other Person, and none of
the Borrowers is an Affiliate of any other Person.
Except as set forth on Schedule 3.9, there are no
outstanding rights to purchase options, warrants or
similar rights or agreements pursuant to which
Borrowers may be required to issue, sell or purchase
any Stock or other equity security except pursuant
to the Stock Option Plans, the Debentures and the
Odd Lot Purchase Program. Schedule 3.9 also lists
Subsidiaries which are Material Subsidiaries.
Schedule 6.3 lists all Indebtedness of Borrowers as
of the Closing Date for individual items in excess
of $100,000 in any instance and Indebtedness in
excess of $500,000 in the aggregate.
3.10 Government Regulation. None of the
Borrowers (i) is an "investment company" or an
"affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of
1940 as amended, and (ii) is subject to regulation
under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce
Act or any other federal or state statute that
restricts or limits the ability of any of the
Borrowers to incur Indebtedness, pledge its assets,
or to perform its obligations hereunder, or under
any other Loan Document. The application of the
proceeds and repayment thereof by Borrowers, and the
consummation of the transactions contemplated by
this Agreement and the other Loan Documents by
Borrowers, will not violate any provision of any
such statute or any rule, regulation or order issued
by the Securities and Exchange Commission.
3.11 Margin Regulations. None of the Borrowers
is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock
and no proceeds of the Term Loan will be used to
purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or
carrying any Margin Stock. Borrowers will not take
or permit to be taken any action which might cause
any Loan Document or any document or instrument
delivered pursuant hereto or thereto to violate any
regulation of the Board of Governors of the Federal
Reserve Board.
3.12 Taxes. All federal, state, local and
foreign tax returns, reports and statements,
including, but not limited to, information returns
(Form 1120-S) required to be filed by Borrowers,
have been filed with the appropriate Governmental
Authority and all Charges and other impositions
shown thereon to be due and payable have been paid
prior to the date on which any fine, penalty,
interest or late charge may be added thereto for
nonpayment thereof, or any such fine, penalty,
interest, late charge or loss has been paid except
where the same are being contested in good faith in
appropriate proceedings and for which adequate
reserves have been made. Borrowers has paid when
due and payable all material Charges required to be
paid by it. Proper and accurate amounts have been
withheld by Borrowers from their respective
employees for all periods in full and complete
compliance by Borrowers with the tax, social
security and unemployment withholding provisions of
applicable federal, state, local and foreign law and
such withholdings have been timely paid to the
respective Governmental Authorities. Schedule 3.12
sets forth those taxable years for which any of the
tax returns of Borrowers are currently being audited
by the IRS or any other applicable Governmental
Authority; and any assessments or threatened
assessments in connection with such audit or
otherwise currently outstanding. Except as
described in Schedule 3.12, Borrowers have not
executed or filed with the IRS or any other
Governmental Authority any agreement or other
document extending, or having the effect of
extending, the period for assessment or collection
of any Charges. Borrowers have not filed a consent
pursuant to IRC Section 341(f) or agreed to have IRC
Section 341(f) (2) apply to any dispositions of
subsection (f) assets (as such term is defined in
IRC Section 341(f)(4)). None of the property owned
by Borrowers is property which is required to be
treated as being owned by any other Person pursuant
to the provisions of IRC Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended, and in
effect immediately prior to the enactment of the Tax
Reform Act of 1986 or is "tax-exempt use property"
within the meaning of IRC Section 168(h). Borrowers
have not agreed or been requested to make any
adjustment under IRC Section 481 (a) by reason of a
change in accounting method or otherwise. Borrowers
have no obligation under any written tax sharing
agreement except as described on Schedule 3.12.
3.13 ERISA.
(a) Schedule 3.13 lists all Plans
maintained or contributed to by Borrowers and all
Qualified Plans maintained or contributed to by any
ERISA Affiliate, and separately identifies the Title
IV Plans, Multiemployer Plans, any multiple employer
plans subject to Section 4064 of ERISA, unfunded
Pension Plans, Welfare Plans and Retiree Welfare
Plans. IRS determination letters regarding the
qualified status under Section 401 of the IRC of
each Qualified Plan have been received as of the
dates listed on Schedule 3.13. Each of the
Qualified Plans has subsequently been amended to
comply with the Tax Reform Act of 1986 and to make
other necessary or desirable changes. To the
knowledge of Borrowers, the Qualified Plans as
amended continue to qualify under Section 401 of the
IRC, the trusts created thereunder continue to be
exempt from tax under the provisions of Section
501(a) of the IRC, and nothing has occurred which
would cause the loss of such qualification or tax-
exempt status. Each Qualified Plan so amended will
be submitted to the IRS for a determination letter
as to the ongoing qualified status of the Plan under
the IRC within the applicable IRC 401(b) remedial
amendment period for the Tax Reform Act of 1986; and
each such Plan shall be amended, including
retroactive amendments, as required during such
determination letter process to maintain the
qualified status of such Plans. To the knowledge of
Borrowers, each Plan is in compliance in all
material respects with the applicable provisions of
ERISA and the IRC, including the filing of all
reports required under the IRC or ERISA which are
true and correct as of the date filed, and all
required contributions and benefits have been paid
in accordance with the provisions of each such Plan.
Neither Borrowers nor any ERISA Affiliate, with
respect to any Qualified Plan, has failed to make
any contribution or pay any amount due as required
by Section 412 of the IRC or Section 302 of ERISA.
Borrowers have not engaged in a prohibited
transaction, as defined in Section 4975 of the IRC
or Section 406 of ERISA, in connection with any Plan
which would subject any such Person (after giving
effect to any exemption) to a material tax on
prohibited transactions imposed by Section 4975 of
the IRC or any other material liability.
(b) Except as set forth on Schedule 3.13:
(i) no Title IV Plan has any Unfunded Pension
Liability; (ii) no ERISA Event or event described in
Section 4062 (e) of ERISA with respect to any Title
IV Plan has occurred or is reasonably expected to
occur; (iii) there are no pending, or to the
knowledge of Borrowers, threatened claims, actions
or lawsuits (other than claims for benefits in the
normal course), asserted or instituted against (x)
any Plan or its assets, (y) any fiduciary with
respect to any Plan or (z) Borrowers or any ERISA
Affiliate with respect to any Plan; (iv) neither any
of the Borrowers nor any ERISA Affiliate has
incurred or reasonably expects to incur any
Withdrawal Liability (and no event has occurred
which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under
Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan; (v)
within the last five years neither any of the
Borrowers nor any other ERISA Affiliate has engaged
in a transaction which resulted in a Title IV Plan
with Unfunded Pension Liabilities being transferred
outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of any such
entity; (vi) no Plan which is a Retiree Welfare Plan
provides for continuing benefits or coverage for any
participant or any beneficiary of a participant
after such participant's termination of employment
(except as may be required by Section 4980B of the
IRC and at the sole expense of the participant or
the beneficiary of the participant); (vii) Borrowers
and each ERISA Affiliate have complied with the
notice and continuation coverage requirements of
Section 4980B of the IRC and the proposed or final
regulations thereunder; and (viii) no liability
under any Plan has been funded, nor has such
obligation been satisfied with, the purchase of a
contract from an insurance company that is not rated
AAA by Standard & Poor's Corporation and the
equivalent by each other nationally recognized
rating agency.
3.14 No Litigation. Except as set forth on
Schedule 3.14, no action, claim or proceeding is now
pending or, to the knowledge of Borrowers,
threatened against Borrowers, at law, in equity or
otherwise, before any court, board, commission,
agency or instrumentality of any federal, state, or
local government or of any agency or subdivision
thereof, or before any arbitrator or panel of
arbitrators, (i) which challenges any such Person's
right, power, or competence to enter into or perform
any of its obligations under the Loan Documents, or
the validity or enforceability of any Loan Document
or any action taken thereunder or (ii) which if
determined adversely if not covered by insurance,
could have or result in a Material Adverse Effect.
To the knowledge of Borrowers, there does not exist
a state of facts which is reasonably likely to give
rise to such proceedings.
3.15 Brokers. No broker or finder acting on
behalf of Borrowers brought about the obtaining,
making or closing of the credit extended pursuant to
this Agreement or the transactions contemplated by
the Loan Documents and Borrowers have no obligation
to any Person in respect of any finder's or
brokerage fees in connection therewith.
3.16 Patents, Trademarks, Copyrights and
Licenses. Except as otherwise set forth on Schedule
3.16, Borrowers own all licenses, patents, patent
applications, copyrights, service marks,
trademarks, trademark applications and trade names
which are necessary to continue to conduct their
business as heretofore conducted by them, now
conducted by them and proposed to be conducted by
them, each of which is listed, together with Patent
and Trademark Office application or registration
numbers, where applicable, on Schedule 3.16.
Borrowers conduct business without infringement or
claim of infringement of any license, patent,
copyright, service xxxx, trademark, trade name,
trade secret or other intellectual property right of
others, except where such infringement or claim of
infringement could not have or result in a Material
Adverse Effect. Except as set forth on Schedule
3.16, to Borrower's knowledge, there is no
infringement or claim of infringement by others of
any material license, patent, copyright, service
xxxx, trademark, trade name, trade secret or other
intellectual property right of Borrowers.
3.17 Full Disclosure. No information contained
in this Agreement, the other Loan Documents, the
Financials or any written statement furnished by or
on behalf of Borrowers thereof pursuant to the terms
of this Agreement or any other Loan Document, which
has previously been delivered to Lender, at the time
furnished contains any untrue statement of a
material fact or omits to state a material fact
necessary to make the statements contained herein or
therein not misleading in light of the circumstances
under which they were made and Borrowers are not
aware that such information, as of the date hereof,
contains any material statement of a material fact
or omits to state material fact necessary to make
the statements contained herein or therein not
misleading in light of the circumstances under which
they were made. With respect to all business plans
and other forecasts and projections (including,
without limitation, the Projections) furnished by or
on behalf of Borrowers and made available to Lender
relating to the financial condition, operations,
business, properties or prospects of Borrowers (i)
all facts stated as such therein are true and
complete in all material respects, no material fact
known to Borrowers applicable thereto was omitted
therefrom, (iii) all assumptions made on that basis
are reasonable under the circumstances, and (iv) the
forecasts or projections are reasonably based on
those facts and assumptions and reflect Borrowers'
judgement based on current circumstances of the
conditions and courses of action for the projected
period. With respect to any such forecasts or
projections made available to Lender after the
Closing Date, the foregoing clauses (i) through (iv)
shall be true and correct in all respects as of the
date of such projections or forecasts.
3.18 Hazardous Materials. Except as set forth
on Schedule 3.18 or routine operations in the
ordinary course of business in compliance with
applicable permits issued by a Governmental
Authority or otherwise not prohibited by applicable
Environmental Laws, each Subject Property does not
contain any Hazardous Material in violation of any
Environmental Law. In addition, Schedule 3.18
discloses existing or potential environmental
liabilities of Borrowers of which Borrowers, after
due inquiry, have knowledge, which could constitute
or result in a Material Adverse Effect or
Environmental Liabilities and Costs. Except as set
forth on Schedule 3.18, Borrowers have not caused or
suffered to occur any Release at, under, above or
within any Subject Property. Borrowers are not
involved in operations which are likely to lead to
the imposition of any liability or Lien on any
premises which they occupy, under the Environmental
Laws, and Borrowers have not permitted any tenant or
occupant of such premises to engage in any such
activity.
3.19 Insurance Policies. Schedule 3.19 lists
all insurance of any nature maintained for current
occurrences by Borrowers, as well as a summary of
the terms of such insurance. Borrowers covenant
that its insurance complies with and shall at all
times comply with the standards set forth on Annex
F.
3.20 Deposit and Disbursement Accounts.
Schedule 3.20 lists all banks and other financial
institutions at which Borrowers maintain deposits
and/or other accounts and/or post office lock boxes,
and such Schedule correctly identifies the name,
address and telephone number of each depository, the
name in which the account is held, a description of
the purpose of the account, and the complete account
number.
3.21 Solvency. Borrowers are, on a
consolidated basis, Solvent.
4. FINANCIAL STATEMENTS AND INFORMATION
4.01 Reports and Notices. Borrowers covenant
and agree that from and after the Closing Date and
until the Termination Date, they shall deliver to
Lender the Financial Statements, Projections and
notices at the times and in the manner set forth on
Annex D.
4.02 Communication with Accountants. Borrowers
authorize Lender to communicate directly with their
independent certified public accountants and tax
advisors upon the occurrence of an Event of Default
at such time and authorize those accountants to
disclose to Lender any and all financial statements
and other supporting financial documents and
schedules including copies of any management letter
with respect to the business, financial condition
and other affairs of Borrowers. At or before the
Closing Date, Borrowers shall deliver a letter
addressed to such accountants and tax advisors
instructing them to comply with the provisions of
this Section 4.
5. AFFIRMATIVE COVENANTS
Borrowers covenant and agree, jointly and
severally, from and after the date hereof and until
the Maturity Date:
5.01 Maintenance of Existence and Conduct of
Business. Each Borrower shall (and shall cause each
Material Subsidiary to) (a) do or cause to be done
all things necessary to preserve and keep in full
force and effect its corporate existence and its
useful rights and franchises, (b) continue to
conduct its business substantially as now conducted
or as otherwise permitted hereunder, (c) at all
times maintain, preserve and protect all of its
Intellectual Property except where the failure to so
maintain, preserve and protect would not result in a
Material Adverse Effect, and preserve all the
remainder of its property, in use or useful in the
conduct of its business and keep the same in good
repair, working order and condition (taking into
consideration ordinary wear and tear) and from time
to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements,
(d) transact business only under the names set forth
on Schedule 3.2 as supplemented from time to time
with the organization of new Subsidiaries, and (e)
be and remain Solvent.
5.02 Payment of Charges and Claims. Each
Borrower shall pay and discharge, or cause to be
paid and discharged in accordance with the terms
thereof, all Charges imposed upon Borrowers or any
Subsidiary or Affiliate of Borrowers or its or their
income and profits, or any of their property (real,
personal or mixed), and lawful claims for labor,
materials, supplies and services or otherwise, which
if unpaid might by law become a Lien on its or any
of its Subsidiaries property; provided, that
Borrowers or any Subsidiary or Affiliate of
Borrowers shall not be required to pay any such
Charge or claim which is being contested in good
faith by proper legal actions or proceedings, so
long as at the time of commencement of any such
action or proceeding and during the pendency thereof
(i) Borrowers notify Lender of any single Charge in
excess of $10,000, (ii) no Default shall have
occurred and be continuing as a result thereof,
(iii) adequate reserves with respect thereto are
established and are maintained in accordance with
GAAP, (iv) such contest operates to suspend
collection of the contested Charges or claims and is
maintained and prosecuted in good faith by
appropriate proceedings, (v) none of the Collateral
would be subject to forfeiture or loss or any Lien
by reason of the institution or prosecution of such
contest, (vi) no Lien shall exist, be imposed or be
attempted to be imposed for such Charges or claims
during such action or proceeding unless the full
amount of such Charge or claim is covered by
insurance, and (vii) Borrowers shall promptly pay or
discharge such contested Charges and all additional
charges, interest penalties and expenses, if any,
and shall deliver to Lender, at Lender's request,
evidence acceptable to Lender of such compliance,
payment or discharge, if such contest is terminated
or discontinued adversely to Borrowers or any
Subsidiary or Affiliate of Borrowers.
5.03 Books and Records. Borrowers shall (and
shall cause each Subsidiary and Affiliate to) keep
adequate records and books of account with respect
to its business activities, in which proper and
adequate entries are made in accordance with GAAP
and on a basis consistent with the Financials
referred to in paragraph I of Schedule 3.4.
5.04 Litigation. Borrowers shall notify Lender
in writing, promptly upon learning thereof, of any
litigation, Claim, administrative proceeding or
other action commenced or threatened against
Borrowers or any Subsidiary or Affiliate of
Borrowers which (i) may involve an amount in excess
of $100,000 individually or in the aggregate or (ii)
could have or result in a Material Adverse Effect if
adversely determined.
5.05 Insurance.
(a) Borrowers shall, at their (or their
Subsidiary's or Affiliate's) sole cost and expense,
maintain or cause to be maintained, the policies of
insurance in such amounts and as otherwise described
in Annex E and Section 2(d). Borrowers shall notify
Lender promptly of any occurrence causing a material
loss or decline in value of any real or personal
property and the estimated (or actual, if available)
amount of such loss or decline, except as specified
otherwise on Annex E. Borrowers hereby direct all
present and future insurers under its "All Risk"
policies of insurance to pay all proceeds of
Collateral payable thereunder directly to Lender and
Borrowers jointly if $100,000 or more and to
Borrowers if less than $100,000 for application to
the indebtedness of the Obligations, provided if no
Default exists, Borrowers may utilize the proceeds
to repair or replace the property affected thereby.
Borrowers irrevocably make, constitute and appoint
Lender as Borrower's true and lawful agent and
attorney in-fact, which power may be exercised upon
the occurrence and continuance of a Default, for
the purpose of making, settling and adjusting claims
under the "All Risk" policies of insurance,
endorsing the name of Borrowers on any check, draft,
instrument or other item of payment for the proceeds
of such "All Risk" policies of insurance, and for
making all determinations and decisions with respect
to such "All Risk" policies of insurance. In the
event Borrowers at any time or times hereafter shall
fail to obtain or maintain (or fail to cause to be
obtained or maintained) any of the policies of
insurance required above or to pay any premium in
whole or in part relating thereto, Lender, without
waiving or releasing any Obligations or Default
hereunder, may at any time or times thereafter (but
shall not be obligated to) obtain and maintain such
policies of insurance and pay such premium and take
any other action with respect thereto which Lender
deems advisable. All sums so disbursed, including
reasonable attorneys' fees, court costs and other
charges related thereto, shall be payable, on
demand, by Borrowers to Lender and shall be
additional Obligations hereunder secured by the
Collateral, provided, that if and to the extent
Borrowers fail to promptly pay any of such sums upon
Lender's demand therefor, Lender is authorized to,
and at its option may, pay such sums on behalf of
Borrowers for payment thereof and such sums so paid
shall be deemed to be Obligations.
(b) Borrowers shall deliver to Lender,
upon Borrowers' receipt, endorsements to all of
their and their Subsidiaries' and Affiliates' (i)
"All Risk" and business interruption insurance
naming Lender as loss payee and (ii) general
liability and other liability policies naming Lender
as additional insured as its interest may appear.
5.06 Compliance with Laws. Borrowers shall
(and shall cause each of their Subsidiaries to)
comply in all material respects with all federal,
state and local laws, permits and regulations
applicable to them, including, without limitation,
those relating to licensing, environmental, ERISA
and labor matters.
5.07 Agreements. Borrowers shall (and shall
cause each of their Subsidiaries to) perform, within
all required time periods (after giving effect to
any applicable grace periods), all of its
obligations and enforce all of its rights under each
agreement, contract, instrument or other document to
which it is a party, including, without limitation,
any leases and customer contracts to which it is a
party where the failure to so perform and enforce
could have or result in a Material Adverse Effect.
Borrowers shall not (and shall not permit any of
their Subsidiaries to) terminate or modify any
provision of any agreement, contract, instrument or
other document to which it is a party which
termination or modification could have or result in
a Material Adverse Effect. Borrowers shall (and
shall cause each of their Subsidiaries to) perform
and comply in all material respects in the ordinary
course of business with all obligations in respect
of Accounts, Chattel Paper, Contracts, Licenses,
Instruments, Documents and all other agreements
constituting or giving rise to Collateral.
Borrowers shall not, without Lender's prior written
consent if a Default exists, with respect to any of
the Accounts, Chattel Paper, Instruments or amounts
due under any Contract (i) grant any extension of
the time of payment of any thereof of Accounts in
the ordinary course of business consistent with past
practices, (ii) compromise or settle the same for
less than the full amount thereof (other than the
compromise or settlement, for adequate
consideration, of Accounts in the ordinary course of
business consistent with past practices, (iii)
release, in whole or in part, any Person liable for
the payment thereof, or (iv) allow any credit or
discount whatsoever thereon other than trade
discounts granted in the ordinary course of business
of Borrowers.
5.08 Supplemental Disclosure. Borrowers shall,
if so requested by Lender, furnish to Lender as
often as it reasonably requests, statements and
schedules further identifying and describing the
Collateral and such other reports in connection with
the Collateral as Lender may reasonably request, all
in reasonable detail, and, Borrowers shall advise
Lender promptly, in reasonable detail, of (i) any
Lien, other than as permitted pursuant to Section
6.07, attaching to or asserted against any of the
Collateral, (ii) any Material Adverse Change in the
composition of the Collateral and (iii) the
occurrence of any other event which in Borrowers'
opinion is likely to have a Material Adverse Effect
upon the Collateral and/or Lender's Lien thereon.
5.09 Environmental Matters. Borrowers shall
(and shall cause each of their Subsidiaries and
Affiliates to) (i) comply with the Environmental
Laws and permits applicable to it, (ii) notify
Lender promptly after any of the Borrowers becomes
aware of any Release upon any Subject Property, and
(iii) promptly forward to Lender a copy of any
order, notice, permit, application, or any
communication or report received by any of the
Borrowers in connection with any such Release or any
other matter relating to the Environmental Laws that
may adversely affect any Subject Property or any of
the Borrowers. The provisions of this Section 5.9
shall apply whether or not the Environmental
Protection Agency, any other federal agency or any
state or local environmental agency has taken or
threatened any action in connection with any Release
or the presence of any Hazardous Materials.
5.10 Landlord's Agreements. Borrowers shall
(and shall cause each Subsidiary to) use reasonable
efforts to obtain a landlord's agreement in form and
substance reasonably acceptable to Lender from the
lessor of any present or future leased premises of
Borrowers (or any Subsidiary and Affiliate).
5.11 Certain Obligations Respecting
Subsidiaries. Borrowers will, and will cause each
of their Subsidiaries and Affiliates to, take such
action from time to time as shall be necessary to
ensure that each of its Subsidiaries is a
wholly-owned Subsidiary except Trans-Lux Pty Limited
which is 75% owned. Borrowers will not, and will
not permit any of its Subsidiaries or Affiliates to,
enter into, after the date of this Agreement, any
indenture, agreement, instrument or other
arrangement that, directly or indirectly, prohibits
or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse
conditions upon, the incurrence or payment of
Indebtedness, the granting of Liens (except Liens
permitted under Section 6.7), the declaration or
payment of dividends or other Restricted Payments,
the making of loans, advances or Investments or the
sale, assignment, transfer or other disposition of
any property or assets.
5.12 Application of Proceeds. Borrowers shall
use the proceeds of the Term Loan as provided in
Section 1.03.
5.13 Fiscal Year. Borrowers shall, and shall
cause each Subsidiary of Borrowers to, maintain as
its Fiscal Year the 12-month period ending on
December 31 of each year.
5.14 Casualty and Condemnation.
(a) Borrowers shall promptly notify
Lender of any loss, damage, or destruction to any
Collateral or any real property owned by Borrowers
or any Subsidiary whether or not constituting
Collateral (collectively, "Property") or arising
from its use, whether or not covered by insurance in
excess of $100,000. Lender is hereby authorized to
adjust losses and collect all insurance proceeds
directly if a Default exists and such property is
Collateral. If, notwithstanding the provisions
hereof which require that Lender and Borrowers be
the joint loss payee, including, without limitation,
the provisions of Section 5.05 allowing for
Borrowers to retain certain insurance proceeds, a
check or other instrument from an insurer is made
payable to Borrowers or Borrowers and Lender
jointly, Lender may endorse any Borrower's name (as
appropriate) thereon and take such other action as
Lender may elect to obtain the proceeds thereof if a
Default exists and such property is Collateral.
After deducting from such proceeds the expenses, if
any, incurred by Lender in the collection or
handling thereof, Lender may apply such proceeds to
the reduction of the Obligations in the manner set
forth in Section 1.07 or, at Lender's option in its
sole discretion, may permit or require the
appropriate Borrowers to use such proceeds, or any
part thereof, to replace, repair or restore such
Property as provided in paragraph (c) below If no
Default exists, Borrowers shall apply such proceeds
in their discretion to replace, repair or restore
such property or to reduce the Obligations.
(b) Borrowers shall, promptly upon
learning of the institution of any proceeding for
the condemnation or other taking of any Property,
notify Lender of the pendency of such proceeding,
and agrees that Lender may participate in any such
proceeding and Borrowers from time to time shall
deliver to Lender all instruments reasonably
requested by Lender to permit such participation.
Lender shall (and is hereby authorized, if a Default
exists, to) collect any and all awards, payments or
other proceeds of any such condemnation or taking
and apply such proceeds to the reduction of the
Obligations in the manner set forth in Section 1.07
or, at Lender's option in its sole discretion, may
permit or require Borrowers to use such proceeds, or
any part thereof, to replace, repair or restore such
Property as provided in paragraph (c) below. If no
Default exists, Borrowers shall exercise such
discretion or use of such proceeds.
(c) Any Property which is to be replaced,
repaired or restored pursuant to paragraph (a) or
(b) above shall be replaced, repaired or restored
pursuant to such reasonable terms and conditions as
Lender may require and with materials and
workmanship of substantially as good a quality as
existed before such loss or taking, and Borrowers
shall commence such replacement, repair or
restoration as soon as practicable and proceed
diligently with it until completion to Lender's
reasonable satisfaction. Borrowers shall provide to
Lender written progress reports, other information
and evidence of its compliance with the foregoing if
over $100,000.
5.15 Closing Fee. Borrowers shall pay the
Closing Fee to Lender on the Closing Date.
5.16 Material Subsidiaries. (a) Borrower shall
cause each Subsidiary acquired by any of the
Borrowers after the date of this Agreement to
deliver to Lender a guaranty duly executed by such
Subsidiary, in form and substance satisfactory to
the Bank, of all obligations of Borrowers under this
Agreement and the Notes, together with: (i) copies
of all corporate action taken by such Subsidiary to
authorize the execution, delivery and performance of
such guaranty; (ii) the favorable written opinion of
counsel to such Subsidiary with respect to such
Subsidiary and the guaranty made by it; and (iii)
such other supporting documents as Lender may
reasonably require.
(b) Upon a Subsidiary becoming a Material
Subsidiary, Borrowers shall give notice thereof to
Lender and shall cause each Material Subsidiary to
deliver (i) an Unlimited Guaranty of the
indebtedness of the Loans in the form of Exhibit B
and (ii) (A) to the extent the value of the assets
of such Material Subsidiary not involved in movie
theatre operations is equal to or exceeds $200,000
at such time or subsequent thereto, a Security
Agreement in the form of Exhibit C and (B) to the
extent the value of the assets of such Material
Subsidiary is less than $200,000, a negative pledge
with respect to such Material Subsidiary in form and
content acceptable to Lender.
5.17 Further Assurances. Borrowers shall, and
shall cause each of their Subsidiaries, at their
cost and expense, upon request of Lender, to duly
execute and deliver, or cause to be duly executed
and delivered, to Lender such further instruments
and do and cause to be done such further acts as may
be necessary or proper in the reasonable opinion of
Lender to carry out more effectually the provisions
and purposes of this Agreement or any other Loan
Document.
6. NEGATIVE COVENANTS
Borrowers covenant and agree, jointly and
severally (for each of them and each Subsidiary and
Affiliate), that:
6.01 Mergers, Subsidiaries, Etc. Except for
Permitted Acquisitions, Borrowers shall not (and
shall not permit any of their Subsidiaries to),
directly or indirectly, by operation of law or
otherwise, merge with, consolidate with, acquire all
or substantially all of the assets or capital stock
of, or otherwise combine with (except another
Borrower or Subsidiary), any Person or acquire any
Subsidiary or Affiliate. Prior to forming any
Subsidiary, Borrowers shall (a) provide prior or
simultaneous notice to Lender, (b) take all actions
requested by Lender to protect and preserve the
Collateral, and (c) receive the prior written
consent of Lender, which consent shall not be
unreasonably withheld.
6.02 Investments. Borrowers shall not (and
shall not permit any of their Subsidiaries to),
directly or indirectly, make or maintain any
Investment except (i) as otherwise permitted by
Section 6.03 or 6.04, (ii) Investments outstanding
on the date hereof and listed on Schedule 6.02,
(iii) investments in readily marketable, direct
obligations of the United States of America, Canada
or any governmental issuer thereof, or obligations
guaranteed by the United States of America, (iv)
certificates of deposit of any domestic commercial
bank which has capital and surplus in excess of
$100,000,000, (v) loans and advances made by
Borrowers to employees of Borrowers and their
Subsidiaries, (vi) additional investments in common
or preferred stock of other Persons, (vii)
investments in marketable municipal securities
provided, however, that such Investments do not
exceed 25% of the total Investments, and (viii)
loans and advances to, and Investments in, any
Subsidiary.
6.03 Indebtedness. Borrowers shall not (and
shall not permit any of their Subsidiaries to)
create, incur, assume or permit to exist any
Indebtedness, except (i) the Obligations, (ii)
deferred Taxes, (iii) Capital Lease Obligations
permitted under clause (iv) of Section 6.07 and
Indebtedness secured by purchase money Liens
permitted under clause (v) of Section 6.07 in a
maximum aggregate amount outstanding not to exceed
$250,000, (vi) Indebtedness in connection with
Permitted Acquisitions, (vii) Subordinated
Indebtedness, including the Debentures, (viii)
Indebtedness owed other than to the Lender, the sole
purpose of which shall be to finance the purchase,
construction or lease of movie theatres and
multimedia productions upon reasonable notice to
Lender, and (ix) other Indebtedness set forth on
Schedule 6.3, and (x) Guaranteed Indebtedness
permitted under Section 6.06 below.
6.04 Employee Loans and Transactions;
Employment Agreements. Except as set forth on
Schedule 6.4, Borrowers shall not (and shall not
permit any of their Subsidiaries or Affiliates to)
enter into any lending, borrowing or other
commercial transaction with any of its officers,
directors or employees, including, without
limitation, payment of any management, consulting,
advisory or similar fee, in excess of the aggregate
of $500,000 outstanding from time to time.
6.05 Capital Structure and Business. Except as
permitted under Section 5.01, Borrowers shall not
(and shall not permit any of their Subsidiaries or
Affiliates to) (i) make any changes in its business
objectives, purposes, or operations which could in
any way adversely affect the repayment of the
Obligations or have or result in a Material Adverse
Effect, or (ii) engage in any business other than
the business currently engaged in by such Person.
6.06 Guaranteed Indebtedness. Borrowers shall
not (and shall not permit any of their Subsidiaries
or Affiliates to) incur any Guaranteed Indebtedness
except (i) for the Obligations, (ii) by endorsement
of instruments or items of payment for deposit to
the general account of such Person, (iii) for
Guaranteed Indebtedness incurred for the benefit of
Borrowers if the primary obligation is permitted by
this Agreement for Borrowers to incur (and such
Guaranteed Indebtedness shall be treated as a
primary obligation for all purposes hereof), (iv)
for performance bonds or indemnities entered into in
the ordinary course of business consistent with past
practices, (v) guarantees of leases and Indebtedness
with respect to the purchase, construction or lease
of movie theatres, (vi) guarantees of Indebtedness
of employees not to exceed $400,000 in the aggregate
or $150,000 as to any individual, and (vii)
guarantees of obligations of joint ventures not to
exceed $3,100,000 in the aggregate.
6.07 Liens. Borrowers shall not (and shall not
permit any of their Subsidiaries or Affiliates to)
create or permit to exist any Lien on any of its
properties or assets except for (i) presently
existing or hereafter created Liens in favor of
Lender to secure the Obligations, (ii) Liens set
forth on Schedule 6.7 existing on the Closing Date,
(iii) Permitted Encumbrances, (iv) purchase money
liens or purchase money security interests upon or
in Equipment acquired by Borrowers or any of their
Subsidiaries or joint ventures with respect to the
purchase, construction or lease of movie theatres,
in the ordinary course of business to secure the
purchase price of such Equipment or to secure
Indebtedness or Capital Lease Obligations permitted
under Section 6.03 incurred solely for the purpose
of financing the acquisition of such Equipment, so
long as such Equipment is not a component, part or
accessory installed on, or an accession, addition or
attachment to, any other Equipment or other property
of Borrowers or any Subsidiary or Affiliate thereof
(except other Equipment on which a security interest
exists under this clause), and (v) extensions,
renewals and replacements of Liens referred to in
clauses (ii) and (iv) above, provided that any such
extension, renewal or replacement Lien is limited to
the property or assets covered by the Lien extended,
renewed or replaced and does not secure Indebtedness
in an amount greater than the amount of the
outstanding Indebtedness secured thereby immediately
prior to such extension, renewal or replacement;
provided, further, that Borrowers shall not create
or permit any Lien to exist on any of the Stock of
Borrower's Subsidiaries or Affiliates or any of
Borrower's Accounts (other than Liens described in
clause (i) above).
6.08 Sale of Assets. Without the prior written
consent of Lender, which consent shall not be
unreasonably withheld, Borrowers shall not (and
shall not permit any of their Material Subsidiaries
to) sell, transfer, convey, assign or otherwise
dispose of any substantial part of their assets or
properties, including, without limitation, any
Collateral; provided, however, that the foregoing
shall not prohibit (i) the sale of Inventory or
other assets in the ordinary course of business;
(ii) the sale or disposition of any assets which
have become obsolete or surplus to the business of
Borrowers or any of their Subsidiaries or
Affiliates.
6.09 Material Contracts. Borrowers shall not
(and shall not permit any of their Material
Subsidiaries to) cancel or terminate any Material
Contract or amend or otherwise modify any Material
Contract, or waive any default or breach any
Material Contract, or take any other action in
connection with any Material Contract that would
have a Material Adverse Effect.
6.10 ERISA. Neither any of the Borrowers nor
any ERISA Affiliate shall acquire any new ERISA
Affiliate that maintains or has an obligation to
contribute to a Pension Plan that has either an
"accumulated funding deficiency," as defined in
Section 302 of ERISA, or any "unfunded vested
benefits," as defined in Section 4006(a)(3)(E)(iii)
of ERISA in the case of any Pension Plan other than
a Multiemployer Plan and in Section 4211 of ERISA in
the case of a Multiemployer Plan. Additionally,
neither any of the Borrowers nor any ERISA Affiliate
shall (a) permit or suffer any condition set forth
on Schedule 3.13 to cease to be met and satisfied at
any time, (b) terminate any Pension Plan that is
subject to Title IV of ERISA where such termination
could reasonably be anticipated to result in
material unfunded liability to Borrowers, (c) permit
any accumulated funding deficiency, as defined in
Section 302(a)(2) of ERISA, to be incurred with
respect to any Pension Plan, (d) fail to make any
contributions or fail to pay any amounts due and
owing as required by the terms of any Plan before
such contributions or amounts become delinquent, (e)
make a complete or partial withdrawal (within the
meaning of Section 4201 of ERISA) from any
Multiemployer Plan, or (f) at any time fail to
provide Lender with copies of any Plan documents or
governmental reports or filings, if reasonably
requested by Lender.
6.11 Financial Covenants. Borrowers shall not
breach or fail to comply with any of the financial
covenants set forth on the attached Schedule 6.11,
each of which shall be calculated in accordance with
GAAP consistently applied as of the date hereof (and
based upon the financial statements delivered
hereunder).
6.12 Hazardous Materials. Except as set forth
in Schedule 3.18, or in compliance with
Environmental Laws, Borrowers shall not and shall
not permit any of their Subsidiaries or Affiliates
or any other Person within the control of Borrowers
to (a) cause or permit a Release of Hazardous
Material on, under in or about any Subject Property,
(b) use, store, generate, treat or dispose of
Hazardous Materials, or (c) transport any Hazardous
Materials to or from any Subject Property.
6.13 Sale-Leasebacks. Except for real property
assets of Borrowers not subject to a mortgage or
other encumbrance in favor of Lender, Borrowers
shall not (and shall not permit any of their
Subsidiaries or Affiliates to) engage in any sale-
leaseback or similar transaction involving any of
its property or assets.
6.14 Cancellation of Indebtedness. Without the
prior written consent of Lender which consent shall
not be unreasonably withheld, Borrowers shall not
(and shall not permit any of their Subsidiaries to)
cancel any claim or Indebtedness owing to it, except
for reasonable consideration and in the ordinary
course of its business, or voluntarily prepay any
Indebtedness (other than the Obligations).
6.15 Restricted Payments. Borrowers shall not
make any Restricted Payment to any Person and
Borrowers shall not permit any Subsidiary or
Affiliate to make any Restricted Payment other than
to Borrowers.
6.16 Real Property Leases. Except for Leases
related to movie theatre operations, Borrowers shall
not (and shall not permit any Subsidiary or
Affiliate to) enter into or renew (by amendment,
modification or otherwise) any Lease other than
renewals of existing Leases upon substantially the
same terms as are in effect on the Closing Date
unless, simultaneously therewith, it gives notice
thereof to Lender.
6.17 Bank Accounts. Borrowers shall not (and
shall not permit any Subsidiary or Affiliate to)
maintain any deposit, operating or other bank
accounts unless, simultaneously therewith, it gives
notice thereof to Lender.
6.18 No Speculative Transactions. Borrowers
shall not (and shall not permit any Subsidiary or
Affiliate to) engage in any transaction involving
commodity options, derivatives or futures contracts
(other than in the ordinary course of business
consistent with past practice).
6.19 Margin Regulations. Borrowers shall not
use the proceeds of the Loan to purchase or carry
any Margin Stock or any equity security of a class
which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
6.20 Limitation on Negative Pledge Clauses.
Borrowers shall not (and shall not permit any
Subsidiary or Affiliate to), directly or indirectly,
enter into any agreement with any Person other than
Lender pursuant to a Loan Document which prohibits
or limits the ability of Borrowers or any
Subsidiaries or Affiliate to create, incur, assume
or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or
hereafter acquired except (a) where required by
Lender, (b) in connection with the purchase,
construction or lease of movie theatres, or (c) with
respect to the financing of Capital Leases.
6.21 Accounting Changes. Borrowers shall not
(and shall not permit any Subsidiary or Affiliate
to) make, any significant change in accounting
treatment and reporting practices except for changes
concurred in by Borrower's independent public
accountants.
7. TERM
7.01 Duration. On the Maturity Date, the
Obligations shall immediately become due and payable
in full, in cash.
7.02 Survival of Obligations. Except as
otherwise expressly provided for in the Loan
Documents or as set forth in a writing signed by
Lender, no termination or cancellation (regardless
of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or
impair the Obligations, duties, indemnities, and
liabilities of Borrowers, or the rights of Lender
relating to any Obligations, due or not due,
liquidated, contingent or unliquidated or any
transaction or event occurring prior to such
termination, or any transaction or event, the
performance of which is not required until the
maturity date of any of the Loans. Except as
otherwise expressly provided herein or in any other
Loan Document, all undertakings, agreements,
covenants, warranties and representations of or
binding upon Borrowers, and all rights of Lender,
all as contained in the Loan Documents shall not
terminate or expire, but rather shall survive such
termination or cancellation and shall continue in
full force and effect until such time as all of the
Obligations have been indefeasibly paid in full in
accordance with the terms of the agreements creating
such Obligations.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.01 Events of Default. The occurrence of any
one or more of the following events (regardless of
the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) Borrowers shall fail to make any
payment in respect of any Obligations hereunder or
under any of the other Loan Documents when due and
payable or declared due and payable, including,
without limitation, any payment of principal of, or
interest on any of the Loans which, in the case of
interest, continues for five (5) days, and for
payments other than principal, continues for twenty
(20) days.
(b) Borrowers shall fail or neglect to
perform, keep or observe any of the provisions of
Section 1.07, Section 4.01, or Section 6, including,
without limitation, any of the provisions set forth
on Annex C, Annex D or Annex E and any applicable
grace period shall have expired.
(c) Any of the Borrowers or any
Subsidiary or Affiliate shall fail or neglect to
perform, keep or observe any term or provision of
this Agreement (other than any such term or
provision referred to in paragraph (a) or (b) above)
or of any of the other Loan Documents, and the same
shall remain unremedied for a period ending on the
first to occur of five (5) days after Borrowers
shall receive written notice of any such failure
from Lender or ten (10) days after Borrowers shall
become aware thereof.
(d) A default shall occur under any other
agreement, document or instrument to which any of
the Borrowers or any Subsidiary or Affiliate is a
party or by which any such Person or its property is
bound, and such default (i) involves the failure to
make any payment (whether of principal, interest or
otherwise) due (whether by scheduled maturity,
required prepayment, acceleration, demand or
otherwise) in respect of any Indebtedness of such
Person in an aggregate amount exceeding $250,000 or
(ii) causes (or permits any holder of such
Indebtedness or a trustee to cause) such
Indebtedness, or a portion thereof in an aggregate
amount exceeding $250,000, to become due prior to
its stated maturity or prior to its regularly
scheduled dates of payment.
(e) Any representation or warranty herein
or in any Loan Document or in any written statement
pursuant thereto or hereto, any report, financial
statement or certificate made or delivered to
Lender by any of the Borrowers or any Subsidiary or
Affiliate shall be untrue or false in any material
respect as of the date when made or deemed made.
(f) Any of the assets of any of the
Borrowers or any Material Subsidiary or Affiliate in
excess of $250,000 in the aggregate shall be
attached, seized, levied upon or subjected to a writ
or distress warrant, or come within the possession
of any receiver, trustee, custodian or assignee for
the benefit of creditors of any of the Borrowers or
any Subsidiary or Affiliate and shall remain
unstayed or undismissed for sixty (60) consecutive
days; or any Person shall apply for the appointment
of a receiver, trustee or custodian for a
substantial part of any Borrower's or any Material
Subsidiary's assets and shall remain unstayed or
undismissed for sixty (60) consecutive days; or any
of the Borrowers or any Material Subsidiary shall
have concealed, removed or permitted to be
concealed or removed, any part of its property, with
intent to hinder, delay or defraud its creditors or
any of them or made or suffered a transfer of any of
its property or the incurring of an obligation which
may be fraudulent under any bankruptcy, fraudulent
conveyance or other similar law.
(g) A case or proceeding shall have been
commenced against any of the Borrowers or any
Material Subsidiary or Affiliate in a court having
competent jurisdiction seeking a decree or order
(i) under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any of the
Borrowers or any Subsidiary or Affiliate or of any
substantial part of its properties, or (iii)
ordering the winding up or liquidation of the
affairs of any of the Borrowers or any Material
Subsidiary or Affiliate and such case or proceeding
shall remain undismissed or unstayed for sixty (60)
consecutive days or such court shall enter a decree
or order granting the relief sought in such case or
proceeding.
(h) Any of the Borrowers or any Material
Subsidiary shall (i) file a petition seeking relief
under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy or
other similar law, (ii) consent to the institution
of proceedings thereunder or to the filing of any
such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar
official) of any of the Borrowers or any Subsidiary
or of any substantial part of any of the Borrower's
or any Subsidiary's properties, or (iii) take any
corporate action in furtherance of any such action.
(i) Final judgment or judgments (after
the expiration of all times to appeal therefrom) for
the payment of money in excess of $250,000 in the
aggregate shall be rendered against any of the
Borrowers or any Material Subsidiary, unless the
same shall be (i) fully covered by insurance in
accordance with Section 5.05, or (ii) vacated,
stayed, bonded, paid or discharged within a period
of fifteen (15) days from the date of such judgment.
(j) There shall occur a Change of
Control.
(k) Any provision of any Loan Document
shall for any reason cease to be valid, binding and
enforceable in accordance with its terms or any of
the Borrowers and the effect thereof would, in
Lender's opinion, impact Lender's right to be repaid
the indebtedness of the Loans on the dates set forth
in this Agreement for such payment, any Subsidiary
or Affiliate or other party thereto shall so state
in writing; or any Lien created under any Collateral
Document shall cease to be a valid and perfected
Lien having the first priority in any of the
Collateral purported to be covered thereby.
(l) An event or condition specified in
Section 6.10 hereof shall occur or exist with
respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all
other such events or conditions, any of the
Borrowers, any Subsidiary or Affiliate thereof or
any ERISA Affiliate shall incur or shall be
reasonably likely to incur an additional liability
to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) in excess of $250,000
in the aggregate.
8.02 Remedies. If any Event of Default shall
have occurred and be continuing the rate of interest
applicable to the Loans and the other Obligations
may, at Lender's sole discretion, be increased,
effective as of the date of the occurrence of the
Default giving rise to such Event of Default, to the
Default Rate as provided in Section 1.04. If any
Event of Default shall have occurred and be
continuing Lender may, without notice, take any one
or more of the following actions: (a) declare all
or any portion of the Obligations of Borrowers to be
forthwith due and payable whereupon such Obligations
shall become and be due and payable; or (b) exercise
any rights and remedies provided to Lender under the
Loan Documents and/or at law or equity, including
all remedies provided under the Code; provided,
however, that upon the occurrence of an Event of
Default specified in Section 8.1 (f), (g) or (h),
the rate of interest applicable to all Obligations
shall be increased automatically to the Default Rate
as provided in Section 1.4, and the Obligations
shall become immediately due and payable, in each
case, without declaration, notice or demand by any
Person.
8.03 Waivers by Borrowers. Except as otherwise
provided for in this Agreement and applicable law to
the full extent permitted by applicable law,
Borrowers waive (i) presentment, demand and protest
and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any
or all Loan Documents, notes, commercial paper,
accounts, contract rights, documents, instruments,
chattel paper and guaranties at any time held by
Lender on which Borrowers may in any way be liable,
(ii) all rights to notice and a hearing on
prejudgment remedy prior to Lender's taking
possession or control of, or to Lender's replevy,
attachment or levy upon, the Collateral or any bond
or security which might be required by any court
prior to allowing Lender to exercise any of its
remedies, and (iii) the benefit of any right of
redemption and all valuation, appraisal and
exemption laws. Borrowers acknowledge that they
have been advised by counsel of its choice with
respect to this Agreement, the other Loan Documents
and the transactions contemplated by this Agreement
and the other Loan Documents.
9. SUCCESSORS AND ASSIGNS
9.01 Successors and Assigns. This Agreement
and the other Loan Documents shall be binding on and
shall inure to the benefit of Borrowers, Lender, and
their respective successors and assigns, except as
otherwise provided herein or therein. Borrowers may
not assign, delegate, transfer, hypothecate or
otherwise convey their rights, benefits, obligations
or duties hereunder or under any of the Loan
Documents without the prior express written consent
of Lender. Any such purported assignment, transfer,
hypothecation or other conveyance by Borrowers
without such prior express written consent shall be
void. The terms and provisions of this Agreement
and the other Loan Documents are for the purpose of
defining the relative rights and obligations of
Borrowers and Lender with respect to the
transactions contemplated hereby and there shall be
no third party beneficiaries of any of the terms and
provisions of this Agreement or any of the other
Loan Documents.
9.02 Assignments and Participations. Lender
may assign and grant participations in all or a
portion of its rights and obligations under this
Agreement to an Affiliate or to any other Person
with an operation in the United States of America.
Lender may furnish any information concerning
Borrowers and their Subsidiaries and Affiliates in
the possession of that Lender from time to time to
assignees and participants (including prospective
assignees and participants), provided that the
Person to whom such information is delivered agrees
to keep such information confidential.
Borrowers shall assist Lender in whatever
manner reasonably necessary to enable or effect any
such assignment or participation, including (but not
limited to) the execution and delivery of any and
all agreements, notes and other documents and
instruments as shall be requested and the delivery
of available informational materials, appraisals or
other documents for, and the participation of
relevant management in meetings with, potential
assignees or participants except that Borrowers
shall not be required to pay for appraisals of real
properties which were appraised in connection with
this Agreement and which appraisals are requested by
such potential assignee or participant. Borrowers
shall certify the correctness, and accuracy of all
descriptions of Borrowers and its affairs contained
in any selling materials and all information
provided by it and included in such materials.
10. MISCELLANEOUS
10.01 Complete Agreement; Modification of
Agreement. The Loan Documents constitute the
complete agreement between the parties with respect
to the subject matter thereof and supersede all
prior agreements, commitments, understandings or
inducements (oral or written, expressed or implied).
Neither this Agreement nor any other Loan Document
nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing
signed by Lender and also Borrowers where a change
is involved.
10.02 Fees and Expenses.
(a) Borrowers shall pay on demand all
reasonable out of pocket costs and expenses
(including, without limitation, reasonable fees and
disbursements of counsel) of Lender in connection
with the preparation, negotiation, approval,
execution, delivery, administration, Default
modification, amendment, waiver, enforcement and
collection proceeding (whether through negotiations,
legal proceedings or otherwise) of the Loan
Documents, and commitments relating thereto, and the
other documents to be delivered hereunder or
thereunder and the transactions contemplated hereby
and thereby and the fulfillment or attempted
fulfillment of conditions precedent hereunder,
including, without limitation: (i) any amendment,
modification or waiver of, or consent with respect
to, any of the Loan Documents or advice in
connection with the administration of the advances
made pursuant hereto or its rights hereunder or
thereunder, whether in connection with a Default or
otherwise; (ii) any litigation, contest, dispute,
suit, proceeding or action (whether instituted by
Lender, Borrowers or any other Person) in any way
relating to the Collateral, any of the Loan
Documents or any other agreements to be executed or
delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including
any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or
against Borrowers or any other Person that may be
obligated to Lender by virtue of the Loan Documents;
(iii) any attempt to enforce any rights of Lender
against Borrowers or any other Person that may be
obligated to Lender by virtue of any of the Loan
Documents; or (iv) after the occurrence and during
the continuance of any Default, any effort to (A)
evaluate, observe, assess Borrowers or its affairs,
or (B) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of the
Collateral.
(b) Without limiting the generality of
clause (a) above, Borrower's obligation to reimburse
Lender for costs and expenses shall include the
reasonable fees and expenses of counsel (and local,
foreign or special counsel, advisors, consultants
and auditors retained by such counsel, accountants,
environmental advisors, appraisers, investment
bankers, management and other consultants and
paralegals; court costs and expenses; photocopying
and duplicating expenses; court reporter fees, costs
and expenses; long distance telephone charges; air
express charges; telegram charges; secretarial
overtime charges; expenses for travel, lodging and
food; and all other out-of-pocket costs and expenses
of every type and nature paid or incurred in
connection with the performance of such legal or
other advisory services.
10.03 No Waiver. No failure on the part of
Lender, at any time or times, to require strict
performance by Borrowers, of any provision of this
Agreement and any of the other Loan Documents shall
waive, affect or diminish any right of Lender
thereafter to demand strict compliance and
performance therewith. Any suspension or waiver of
a Default shall not suspend, waive or affect any
other Default whether the same is prior or
subsequent thereto and whether of the same or of a
different type. None of the undertakings,
agreements, warranties, covenants and represen-
tations of Borrowers contained in this Agreement or
any of the other Loan Documents and no Default by
Borrowers shall be deemed to have been suspended or
waived by Lender, unless such waiver or suspension
is by an instrument in writing signed by an officer
of or other authorized employee of Lender and
directed to Borrowers specifying such suspension or
waiver.
10.04 Remedies. The rights and remedies of
Lender under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies which
Lender may have under any other agreement,
including, without limitation, the Loan Documents,
by operation of law or otherwise. Recourse to the
Collateral shall not be required.
10.05 Severability. Wherever possible,
each provision of this Agreement shall be
interpreted in such manner as to be effective and
valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be
ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of
such provision or the remaining provisions of this
Agreement.
10.06 Conflict of Terms. Except as
otherwise provided in this Agreement or any of the
other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict
with, or inconsistent with, any provision in any of
the other Loan Documents, the provisions contained
in this Agreement shall govern and control.
10.07 Right of Set-off. Subject to Section
1.01(f), upon the occurrence and during the
continuance of any Event of Default, Lender is
hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special,
time or demand, provisional or final) at any time
held and other indebtedness at any time owing by
Lender to or for the credit or the account of
Borrowers against any and all of the Obligations now
or hereafter existing irrespective of whether or not
Lender shall have made any demand under this
Agreement or any other Loan Document. The rights of
Lender under this Section are in addition to the
other rights and remedies (including, without
limitation, other rights of set-off) which Lender
may have.
10.08 Authorized Signature. Until Lender
shall be notified by Borrowers to the contrary, the
signature upon any document or instrument delivered
pursuant hereto and believed by Lender or any of
Lender's officers, agents, or employees to be that
of an officer or duly authorized representative of
Borrowers listed on Schedule 10.8 shall bind
Borrowers and be deemed to be the act of Borrowers
affixed pursuant to and in accordance with
resolutions duly adopted by Borrower's Board of
Directors, and Lender shall be entitled to assume
the authority of each signature and authority of the
person whose signature it is or appears to be unless
the person acting in reliance of such signature
shall have actual knowledge of the fact that such
signature is false or the person whose signature or
purported signature is presented is without
authority.
10.09 GOVERNING LAW. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN
ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF CONNECTICUT, APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
BORROWERS HEREBY CONSENT AND AGREE THAT THE STATE OR
FEDERAL COURTS LOCATED IN NEW YORK CITY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES PERTAINING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT LENDER
AND BORROWERS ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF CONNECTICUT AND, PROVIDED, FURTHER, THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
COLLECT THE OBLIGATIONS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF LENDER. BORROWERS EXPRESSLY SUBMIT
AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
BORROWERS HEREBY WAIVE ANY OBJECTION WHICH BORROWERS
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS. BORROWERS
HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWERS
AT THE ADDRESSES SET FORTH IN SECTION 10.10 OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH BORROWER'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE U.S. MAILS, PROPER POSTAGE PREPAID.
10.10 Notices. Except as otherwise
provided herein, whenever it is provided herein that
any notice, demand, request, consent, approval,
declaration or other communication shall or may be
given to or served upon either of the parties by the
other party, or whenever either of the parties
desires to give or serve upon the other party any
communication with respect to this Agreement, each
such notice, demand, request, consent, approval,
declaration or other communication shall be in
writing and shall be deemed to have been validly
served, given or delivered (i) upon the earlier of
actual receipt or three (3) days after deposit in
the United States Mail, registered or certified
mail, return receipt requested, with proper postage
prepaid, (ii) upon transmission, when sent by
telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed
by delivery of a copy by personal delivery or United
States Mail as otherwise provided in this Section
10.10, (iii) one (1) Business Day after deposit with
a reputable overnight courier with all charges
prepaid or (iv) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the
party to be notified and sent to the address or
facsimile number indicated below or to such other
address (or facsimile number) as may be substituted
by notice given as herein provided. The giving of
any notice required hereunder may be waived in
writing by the party entitled to receive such
notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval,
declaration or other communication to any Person
(other than Borrowers or Lender) designated below to
receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request,
consent, approval, declaration or other
communication.
(a) If to Lender:
First Fidelity Bank
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
With copies to:
Xxxxxx & Xxxxxx, Ribicoff & Xxxxxx
One Landmark Square, 00xx xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
(b) If to any of the Borrowers, at:
Trans-Lux Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxx and Xx.
Xxxxxx Xxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Weisman, Celler, Spett & Xxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
10.11 Section Titles. The Section titles and
Table of Contents contained in this Agreement are
and shall be without substantive meaning or content
of any kind whatsoever and are not a part of this
Agreement.
10.12 Counterparts. This Agreement may be
executed in any number of separate counterparts,
each of which shall, collectively and separately,
constitute one agreement.
10.13 Time of the Essence. Time is of the
essence of this Agreement and each of the other Loan
Documents.
10.14 WAIVER OF JURY TRIAL. BECAUSE DISPUTES
ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON, THE
BORROWERS DESIRE THAT THEIR DISPUTES BE RESOLVED BY
A JUDGE. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM, THE
BORROWERS HERETO EACH WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO, THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
10.15 PREJUDGMENT REMEDY WAIVER. BORROWERS
ACKNOWLEDGE THAT THE LOANS EVIDENCED BY THIS
AGREEMENT ARE COMMERCIAL TRANSACTIONS AND WAIVE
THEIR RIGHT TO NOTICE AND HEARING UNDER CHAPTER 903a
OF THE CONNECTICUT GENERAL STATUTES OR AS OTHERWISE
ALLOWED UNDER ANY STATE OR FEDERAL LAW WITH RESPECT
TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY DESIRE TO
USE, AND FURTHER WAIVE DILIGENCE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT,
PROTEST AND NOTICE OF ANY RENEWALS OR EXTENSIONS.
BORROWERS ACKNOWLEDGE THAT THEY MAKE THIS WAIVER
KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT
DURESS, AND ONLY AFTER CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS.
BORROWERS FURTHER CONSENT TO THE ISSUANCE OF ANY
SUCH PREJUDGMENT REMEDIES WITHOUT A BOND AND AGREE
NOT TO REQUEST OR FILE MOTIONS SEEKING TO REQUIRE
THE POSTING OF A BOND UNDER PUBLIC ACT 93-431 IN
CONNECTION WITH LENDER'S EXERCISE OF ANY PREJUDGMENT
REMEDY.
This Agreement has been duly executed as of the
date first written above.
TRANS-LUX CORPORATION
By /s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief
Financial Officer
TRANS-LUX CONSULTING CORPORATION
By /s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief
Financial Officer
TRANS-LUX SIGN CORPORATION
By /s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief
Financial Officer
TRANS-LUX MONTEZUMA CORPORATION
By /s/ Xxxxxx Xxxx
------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief
Financial Officer
INTEGRATED SYSTEMS ENGINEERING, INC.
By /s/ Xxxxxx Xxxx
-----------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief
Financial Officer
FIRST FIDELITY BANK
By /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Its Vice President
ANNEXES, SCHEDULES AND EXHIBITS
TO
CREDIT AGREEMENT
Dated as of August 28, 1995
between
TRANS-LUX CORPORATION
TRANS-LUX CONSULTING CORPORATION
TRANS-LUX SIGN CORPORATION
TRANS-LUX MONTEZUMA CORPORATION
and
INTEGRATED SYSTEMS ENGINEERING, INC.
as Borrowers
and
FIRST FIDELITY BANK
as Lender
ANNEX A
to
CREDIT AGREEMENT
Dated as of August 28, 1995
DEFINITIONS
In addition to the defined terms appearing below,
capitalized terms used in this Agreement shall have
(unless otherwise provided elsewhere in this
Agreement) the following respective meanings when used
in this Agreement
"Account Debtor" shall mean any Person who
may become obligated to Borrowers under, with respect
to, or on account of, an Account, Chattel Paper or
General Intangibles.
"Accounts" shall mean all "accounts," as
such term is defined in the Code, now owned or
hereafter acquired by Borrowers and, in any event,
including, without limitation, (a) all accounts
receivable, other receivables, book debts and other
forms of obligations (other than forms of obligations
evidenced by chattel paper, documents or instruments)
now owned or hereafter received or acquired by or
belonging or owing to Borrowers, whether arising out
of goods sold or services rendered by them or from any
other transaction (including, without limitation, any
such obligations which may be characterized as an
account or contract right under the Code), (b) all of
Borrower's rights in, to and under all purchase orders
or receipts now owned or hereafter acquired by them
for goods or services, (c) all of Borrower's rights to
any goods represented by any of the foregoing
(including, without limitation, unpaid sellers' rights
of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or
repossessed goods), (d) all monies due or to become
due to Borrowers under all purchase orders and
contracts for the sale or lease of goods or the
performance of services or both by Borrowers or in
connection with any other transaction (whether or not
yet earned by performance on the part of Borrowers)
now or hereafter in existence, including, without
limitation, the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral
security and guarantees of any kind, now or hereafter
in existence, given by any Person with respect to any
of the foregoing.
"Affiliate" shall mean, with respect to any
Person, (i) each Person that, directly or indirectly,
owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, more than fifty
percent (50%) of the Stock having ordinary voting
power in the election of directors of such Person,
(ii) each Person that controls, is controlled by or is
under common control with such Person or any Affiliate
of such Person or (iii) each of such Person's
officers, directors, joint ventures and partners. For
the purpose of this definition, "control" of a Person
shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of its
management or policies, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement
to which this Annex A is attached and of which it
forms a part including all Annexes, Schedules, and
Exhibits attached or otherwise identified thereto,
restatements and modifications and supplements hereto
and any appendices, attachments, exhibits or schedules
to any of the foregoing, and shall refer to this
Agreement as the same may be in effect at the time
such reference becomes operative, provided, however
that any reference to the Schedules to this Agreement
shall be deemed a reference to the Schedules as in
effect on the Closing Date or in a written amendment
thereto executed by Borrowers and Lender.
"Banking Day" means in respect of any city,
any day on which commercial banks are open for
business (including dealings in foreign exchange and
foreign currency deposits) in that city.
"Base Rate" shall mean the rate of interest
established by Lender from time to time as its
reference rate in making loans but shall not reflect
the rate of interest charged to any particular class
of borrowers. The Base Rate shall change
automatically as of the date of a change in the Base
Rate, without notice to the Borrowers.
"Borrowers" shall mean Trans-Lux
Corporation, a Delaware corporation, Trans-Lux
Consulting Corporation, a Delaware corporation, Trans-
Lux Sign Corporation, a Delaware corporation,
Integrated Systems Engineering, Inc., a Utah
corporation, and Trans-Lux Montezuma Corporation, a
New Mexico corporation, and "Borrower" shall mean
individually any of the foregoing.
"Business Day" means in respect of any date
that is specified in a confirmation to be subject to
adjustment in accordance with any applicable Modified
Following Business Day Convention, a day on which
commercial banks and foreign exchange markets settle
payments in New York.
"Capital Expenditures" shall mean all
payments or accruals (including Capital Lease
Obligations) for any fixed assets or improvements,
including Equipment held for lease but excluding
expenditures related to movie theaters, or for
replacements, substitutions or additions thereto, that
have a useful life of more than one year and that are
required to be capitalized under GAAP.
"Capital Lease" shall mean, with respect to
any Person, any lease of any property (whether real,
personal or mixed) by such Person as lessee that, in
accordance with GAAP, either would be required to be
classified and accounted for as a capital lease on a
balance sheet of such Person or otherwise be disclosed
as such in a note to such balance sheet, other than,
in the case of Borrowers, any such lease under which
any of the Borrowers is the lessor.
"Capital Lease Obligation" shall mean, with
respect to any Capital Lease, the amount of the
obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet
of such lessee in respect of such Capital Lease or
otherwise be disclosed in a note to such balance
sheet.
"Change of Control" shall mean the merger,
consolidation or acquisition of TLX by or with a
Person not a Subsidiary.
"Charges" shall mean all federal, state,
county, city, municipal, local, foreign or other
governmental taxes (including, without limitation,
taxes owed to PBGC at the time due and payable),
levies, assessments, charges, liens, claims or
encumbrances upon or relating to (i) the Collateral,
(ii) the Obligations, (iii) the employees, payroll,
income or gross receipts of Borrowers, (iv) Borrower's
ownership or use of any of their assets, or (v) any
other aspect of any Borrower's business.
"Chattel Paper" shall mean any "chattel
paper," as such term is defined in the Code, now owned
or hereafter acquired by Borrowers, wherever located.
"Claim" shall have the meaning assigned to
it in Section 1.09.
"Closing Date" shall mean the Business Day
on which the conditions precedent set forth in
Section 2 have been satisfied or waived and the
initial Revolving Credit Advance has been made.
"Closing Fee" shall have the meaning
assigned to it in Annex C.
"Code" shall mean the Uniform Commercial
Code as the same may, from time to time, be in effect
in the State of Connecticut; provided, however, in the
event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority
of Lender's security interest in any Collateral is
governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of Connecticut,
the term "Code" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions
related to such provisions.
"Collateral" shall mean the property covered
by the Collateral Documents and any other property,
real or personal, tangible or intangible, now existing
or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor
of Lender to secure the Obligations.
"Collateral Documents" shall mean the
Security Agreements and all instruments necessary to
perfect the Security Interests (as defined in the
Security Agreements).
"Consolidated Tangible Net Worth" shall
mean, with respect to any Person, at any date, the net
worth of such Person on a consolidated basis less the
goodwill and other intangible assets of such Person on
a consolidated basis at such date determined in
accordance with GAAP.
"Consolidated Unsubordinated Liabilities"
shall mean, with respect to any person, at any date,
all liabilities of such person which would appear on
the liabilities side of a consolidated balance sheet,
other than capital stock, capital surplus, retained
earnings, minority interests, deferred credit,
subordinated indebtedness which is approved by Lender
(including the Debentures which are deemed approved)
and contingency reserves required by GAAP.
"Contracts" shall mean all the contracts,
undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments)
in or under which Borrowers may now or hereafter have
any right, title or interest, including, any agreement
relating to the terms of payment or the terms of
performance of any Account.
"Copyrights" shall mean any U.S. copyright
to which Borrowers now or hereafter have title, as
well as any application for a U.S. copyright hereafter
made by Borrowers.
"Current Maturities" shall mean with respect
to any Person, as of the date designated, payments
scheduled to be paid under Indebtedness within one
year after such date as determined in accordance with
GAAP.
"Customs" shall mean the United States
Custom Department.
"Debentures" shall mean the 9% Convertible
Subordinated Debentures due 2005 issued by TLX and the
9 1/2% Subordinated Debentures due 2012 issued by TLX.
"Debt To Worth Ratio" shall mean, with
respect to any Person, at any date, the ratio of
Consolidated Unsubordinated Liabilities to the sum of
(i) Consolidated Tangible Net Worth and (ii)
Subordinated Indebtedness.
"Default" shall mean any Event of Default or
any event which, with the passage of time or notice or
both, would, unless cured or waived, become an Event
of Default.
"Default Rate" shall mean a rate per annum
equal to four hundred basis points (4.00%) above the
interest rate as in effect from time to time under
Section 1.1.
"Dollars" and "$" shall mean lawful money of
the United States of America.
"DOL" shall mean the United States
Department of Labor or any successor thereto.
"Documents" shall mean any "documents," as
such term is defined in the Code, now owned or
hereafter acquired by Borrowers, wherever located, and
in any event any bills of lading, dock warrants, dock
receipts, warehouse receipts, or other documents of
title.
"EBITDA" shall mean, for any Person for any
period, the Net Income (Loss) of such Person for such
period, plus the sum of the following amounts of such
Person and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP to the
extent included in the determination of such Net
Income (Loss): (i) interest expense (net of interest
income), (ii) income tax expense, (iii) depreciation
and (iv) amortization.
"Environmental Laws" shall mean all federal,
state and local laws, statutes, ordinances, orders and
regulations, now or hereafter in effect, and in each
case as amended or supplemented from time to time, and
any applicable judicial or administrative
interpretation thereof relating to the regulation and
protection of human health, safety, the environment
and natural resources (including, without limitation,
ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include,
but are not limited to, the Comprehensive
Environmental Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. SS 9601 et seq.)
("CERCLA"); the Hazardous Material Transportation Act,
as amended (49 U.S.C. SS 1801 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C. SS 136 et seq.); the Resource
Conservation and Recovery Act, as amended (42 U.S.C.
SS 6901 et seq.) ("RCRA"); the Toxic Substance Control
Act, as amended (15 U.S.C. SS 2601 et seq.); the Clean
Air Act, as amended (42 U.S.C. SS 740 et seq.); the
Federal Water Pollution Control Act, as amended (33
U.S.C. SS 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. SS 651 et seq.)
("OSHA"); and the Safe Drinking Water Act, as amended
(42 U.S.C. SS 300(f) et seq.), and any and all
regulations promulgated thereunder, and all analogous
state and local counterparts or equivalents and any
transfer of ownership notification or approval
statutes.
"Environmental Liabilities and Costs" shall
mean all liabilities, obligations, responsibilities,
remedial actions, removal costs, losses, damages,
punitive damages, consequential damages, treble
damages, costs and expenses (including, without
limitation, all reasonable fees, disbursements and
expenses of counsel, experts and consultants and costs
of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result
of any claim, suit, action or demand by any person or
entity, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil
statute or common law (including, without limitation,
any thereof arising under any Environmental Law or
permit, order or agreement with any Governmental
Authority) issued or enforced pursuant to an
Environmental Law and which relate to any health or
safety condition regulated under any Environmental Law
or in connection with any other environmental matter
or Release, threatened Release, or the presence of a
Hazardous Material.
"Environmental Reviews and Audits" shall
mean all environmental reviews and audits and all
other information pertaining to actual or potential
environmental claims, whether in existence on the
Closing Date or subsequent thereto with respect to one
or more assets of Borrowers.
"Equipment" shall mean any "equipment" as
such term is defined in the Code, and, in any event,
shall include, but shall not be limited to, all
machinery, equipment, furnishings, fixtures and
vehicles and any and all additions, accessions,
substitutions and replacements of any of the
foregoing, wherever located, together with all
attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"ERISA" shall mean the Employee Retirement
Income Security Act of 1974 (or any successor
legislation thereto), as amended from time to time,
and any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect
to any of the Borrowers, any trade or business
(whether or not incorporated) under common control
with any of the Borrowers and which, together with any
of the Borrowers, are treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o)
of the IRC.
"ERISA Event" shall mean, with respect to
any of the Borrowers, any Subsidiary thereof or any
ERISA Affiliate, (i) a Reportable Event with respect
to a Title IV Plan or a Multiemployer Plan; (ii) the
withdrawal of any of the Borrowers, any Subsidiary
thereof or any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer, as defined in
Section 4001(a) (2) of ERISA; (iii) the complete or
partial withdrawal of any of the Borrowers, any
Subsidiary thereof or any ERISA Affiliate from any
Multiemployer Plan; (iv) the filing of a notice of
intent to terminate a Title IV Plan or the treatment
of a plan amendment as a termination under
Section 4041 of ERISA; (v) the institution of
proceeding to terminate a Title IV Plan or Multi-
employer Plan by the PBGC; (vi) the failure to make
required contributions to a Qualified Plan; or (vii)
any other event or condition which might reasonably be
expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a
trustee to administer, any Title IV Plan or
Multiemployer Plan or the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due
but not delinquent under Section 4007 of ERISA.
"Event of Default" shall have the meaning
assigned to it in Section 8.01.
"Executive Officers" shall mean the
Chairman, Vice Chairman, President, Chief Executive
Officer, Chief Operating Officer, Chief Financial
Officer, Executive Vice President(s), Senior Vice
President(s), Vice Presidents, Treasurer and Secretary
of any of the Borrowers or any Subsidiary thereof.
"Fees" shall mean the fees due to Lender as
set forth in Section 1.05 or otherwise pursuant to the
Loan Documents.
"Financials" shall mean the financial
statements referred to in paragraphs I(i) and I(ii) of
Schedule 3.4.
"Fiscal Quarter" shall mean the three month
periods ending on March 31, June 30, September 30 or
December 31.
"Fiscal Year" shall mean the 12-month period
of Borrowers and its Subsidiaries ending December 31
of each year. Subsequent changes of the fiscal year of
Borrowers and its Subsidiaries shall not change the
term "Fiscal Year," unless Lender shall consent in
writing to such change.
"Fixed Charge Coverage Ratio" shall mean,
with respect to any Person, on a consolidated basis,
at any date, the ratio of EBITDA less dividends paid
by TLX to the sum of (i) Interest Expense, (ii)
Current Maturities (excluding "balloon" payments but
including Capital Lease Obligations), and (iii)
Capital Expenditures for Rental Equipment.
"GAAP" means generally accepted accounting
principles in the United States of America as in
effect from time to time (except as provided herein)
as set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards
Board, which are applicable to the circumstances as of
the date of determination.
"General Intangibles" shall mean any
"general intangibles," as such term is defined in the
Code, now owned or hereafter acquired by Borrowers
and, in any event, including, without limitation, all
right, title and interest which Borrowers may now or
hereafter have in or under any Contract, all customer
lists, Intellectual Property, interests in
partnerships, joint ventures and other business
associations, permits, proprietary or confidential
information, inventions (whether or not patented or
patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models,
drawings, materials and records, goodwill (including,
without limitation, the goodwill associated with any
Intellectual Property), all rights and claims in or
under insurance policies, (including, without
limitation, insurance for fire, damage, loss, and
casualty, whether covering personal property, real
property, tangible rights or intangible rights, all
liability, life, key man, and business interruption
insurance, and all unearned premiums), uncertificated
securities, chooses in action, and other bank
accounts, rights to receive tax refunds and other
payments and rights of indemnification.
"Goods" shall mean all "goods" as such term
is defined in the Code, now owned or hereafter
acquired by Borrowers, wherever located, including,
without limitation, movables, fixtures, Equipment,
Inventory, or other tangible personal property.
"Governmental Authority" shall mean any
nation or government, any state or other political
subdivision thereof, and any agency, department or
other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Indebtedness" shall mean, as to
any Person, any obligation of such Person guaranteeing
any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the
"primary obligor") in any manner including, without
limitation, any obligation or arrangement of such
Person (i) to purchase or repurchase any such primary
obligation, (ii) to advance or supply funds (a) for
the purchase or payment of any such primary obligation
or (b) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the
net worth or solvency or any balance sheet condition
of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of
assuring the owner of any such primary obligation of
the ability of the primary obligor to make payment of
such primary obligation, or (iv) to indemnify the
owner of such primary obligation against loss in
respect thereof.
"Guaranties" shall mean the Unlimited
Guaranty of each of the Guarantors in the form of
Exhibit "B".
"Guarantors" shall mean each of the
Borrowers (other than TLX) and all other Subsidiaries
of TLX.
"Hazardous Material" shall mean a Hazardous
Substance and/or a Hazardous Waste.
"Hazardous Substance" shall mean any
element, material, compound, mixture, solution,
chemical, substance, or pollutant within the
definition of "hazardous substance" under Section
101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 USC SS 9601(14);
petroleum or any fraction, byproduct or distillation
product thereof; asbestos, polychlorinated biphenyls,
or any radioactive substances; and any material
regulated as a hazardous substance by any jurisdiction
in which Borrowers own or operate or have owned or
operated a facility.
"Hazardous Waste" shall mean any element,
pollutant, contaminate or discarded material
(including any radioactive material) within the
definition of Section 103(6) of the Resource
Conservation and Recovery Act, 42 USCA SS 6903(6); and
any material regulated as a hazardous waste by any
jurisdiction in which Borrowers owns or operates or
have owned or operated a facility, or to which
Borrowers sends material for treatment, storage or
disposal as waste.
"Indebtedness" of any Person shall mean (i)
all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or
services (including, without limitation, reimbursement
and all other obligations with respect to surety
bonds, letters of credit and bankers' acceptances,
whether or not matured, but not including obligations
to trade creditors incurred in the ordinary course of
business), (ii) all obligations evidenced by notes,
bonds, debentures or similar instruments, (iii) all
indebtedness created or arising under any conditional
sale or other title retention agreements with respect
to property acquired by such Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to
repossession or sale of such property), (iv) all
Capital Lease Obligations, (v) all Guaranteed
Indebtedness, (vi) all Indebtedness referred to in
clause (i), (ii), (iii), (iv) or (v) above secured by
(or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured
by) any Lien upon or in property (including, without
limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness,
(vii) the Obligations, and (viii) all liabilities
under Title IV of ERISA.
"Indemnified Person" shall have the meaning
assigned to it in Section 1.09.
"Instruments" shall mean any "instrument,"
as such term is defined in the Code, now owned or
hereafter acquired by Borrowers, wherever located and
in any event all certificated securities, certificate
of deposit and all notes and other, without
limitation, evidences of indebtedness, other than
instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intellectual Property" shall mean,
collectively, all Trademarks, all Patents, all
Copyrights and all Licenses now held or hereafter
acquired by Borrowers, together with all franchises,
tax refund claims, rights of indemnification, payments
under insurance, indemnities, warranties and
guarantees payable with respect to the foregoing.
"Interest Expense" shall mean for any period
the amount which would, in conformity with GAAP, be
set forth opposite the caption "interest expense" or
any like caption on an income statement of such
Person.
"Inventory" shall mean any "inventory," as
such term is defined in the Code, now or hereafter
owned or acquired by, Borrowers, wherever located,
and, in any event, including, without limitation,
inventory, merchandise, goods and other personal
property which are held by or on behalf of Borrowers
for sale or lease or are furnished or are to be
furnished under a contract of service or which
constitute raw materials, work in process or materials
used or consumed or to be used or consumed in
Borrower's business or in the processing, production,
packaging, promotion, delivery or shipping of the
same, including, without limitation, other supplies,
and all accessions and additions thereto and all
documents of title covering any of the foregoing.
"IRC" shall mean the Internal Revenue Code
of 1986, as amended, and any successor thereto.
"IRS" shall mean the Internal Revenue
Service, or any successor thereto.
"ISE" shall mean Integrated Systems
Engineering, Inc., a Utah corporation.
"Investment" shall mean, for any Person (a)
the acquisition (whether for cash, property, services
or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership
interests or other securities of any other Person or
any agreement to make any such acquisition; (b) the
making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including
the purchase of property from another Person subject
to an understanding or agreement, contingent or
otherwise, to resell such property to such Person);
and (c) the entering into of any Guaranteed
Indebtedness of, or other contingent obligation with
respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount
committed to be advanced, lent or extended to such
Person.
"Leases" shall mean all of those leasehold
estates in real property now owned or hereafter
acquired by any Borrower, as lessee.
"Lender" shall mean First Fidelity Bank, a
Connecticut banking corporation having an office at
000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
"License" shall mean any Patent License,
Trademark License or other license of rights or
interests now held or hereafter acquired by Borrowers.
"Lien" shall mean any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement
of any kind or nature whatsoever (including, without
limitation, any lease or title retention agreement,
any financing lease having substantially the same
economic effect as any of the foregoing, and the
filing of, or agreement to give, any financing
statement perfecting a security interest under the
Code or comparable law of any jurisdiction).
"Loan A" shall mean the term loan facility
extended by Lender to TLX, ISE and TLM in the original
principal amount of $8,000,000, evidenced by Note A.
"Loan B" shall mean the term loan facility
extended by Lender to TLX, ISE, TLCC and TLSC in the
original principal amount of $7,581,000, evidenced by
Note B.
"Loan C" shall mean the revolving loan
facility extended by Lender to TLX in the original
principal amount of $4,000,000, evidenced by Note C.
"Loan C Commitment Termination Date" shall
mean the earliest of (i) June 30, 1997, (ii) the date
of termination of Loan C pursuant to Section 8.2, and
(iii) the date of termination of Loan C in accordance
with the provisions of Section (a)(iii)(E) of Schedule
1.1.
"Loan C Maturity Date" shall mean June 30,
2002.
"Loan Documents" shall mean this Agreement,
the Notes, the Guaranties, the Swap Agreement, the
Collateral Documents and all other instruments and
agreements executed or delivered in connection with
the foregoing.
"Loans" shall mean Loan A, Loan B and Loan
C.
"Loan Party" means any Borrower and each of
the Guarantors.
"Long Term Funded Debt" means, with respect
to any Person, all of its Indebtedness which by the
terms of the agreement governing or instrument
evidencing such Indebtedness matures more than one
year from, or is directly or indirectly renewable or
extendible at the option of such Person under a
revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of
more than one year from, the date of creation thereof,
including current maturities of long-term debt,
revolving credit, and short-term debt extendible
beyond one year at the option of the debtor, and shall
also include, without limitation, the Obligations.
"Margin Stock" shall have the meaning
specified in Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, as in effect
from time to time.
"Material Adverse Effect" shall mean (a) a
material adverse effect on (i) the business, assets,
operations, prospects, or financial or other condition
of Borrowers, (ii) Borrower's ability to pay or
perform their obligations under the Loan Documents in
accordance with the terms thereof, (iii) the
Collateral or Lender's Lien on the Collateral or the
priority of any such Lien, or (iv) the rights and
remedies of Lender under this Agreement and the other
Loan Documents or (b) the incurrence by Borrowers of
any liability, contingent or liquidated, which has an
actual or estimated incurrence of liability, or dollar
exposure or loss, greater than $2,500,000 to such
Person (to the extent not covered by insurance) which
loss or liability would not be reflected on such
Person's income statement or balance sheet.
"Material Contracts" shall mean each
contract to which any of the Borrowers or Subsidiaries
is now or hereafter a party involving aggregate
consideration payable to or by any of the Borrowers or
any of their Subsidiaries, contingent or otherwise, in
excess of $500,000, except contracts as to which the
remaining consideration payable to or by any of the
Borrowers is less than $250,000.
"Material Subsidiary" shall mean each
Subsidiary so designated in Schedule 3.9, each of
which has assets in excess of $100,000 and all such
Subsidiaries in existence after the date hereof.
"Maximum Lawful Rate" shall have the meaning
assigned to it in Section 1.04(e).
"Modified Following Business Day Convention"
means the convention for adjusting any relevant date
if it would otherwise fall on a day that is not a
Business Day; that date will be the first following
day that is a Business Day unless that day falls in
the next calendar month, in which case that date will
be the first preceding day that is a Business Day.
"Multiemployer Plan" shall mean a
"multiemployer plan" as defined in Section 4001(a) (3)
of ERISA, and to which Borrowers or any ERISA
Affiliate is making, is obligated to make, has made or
been obligated to make, contributions on behalf of
participants who are or were employed by any of them.
"Non-Use Fee" shall have the meaning
assigned to it in Annex D.
"Note A" shall mean the Term Promissory
Note in the original principal amount of $8,000,000,
in the form of the attached Exhibit "A-1".
"Note B" shall mean the Term Promissory
Note in the original principal amount of $7,581,000,
in the form of the attached Exhibit "A-2".
"Note C" shall mean the Promissory Note in
the original principal amount of $4,000,000, in the
form of the attached Exhibit "A-3".
"Notes" shall mean Note A, Note B and Note
C. .
"Notice of Revolving Credit Advance" shall
have the meaning assigned to it in Section 1.1 in the
form the attached Exhibit "D".
"Obligations" shall mean all loans,
advances, debts, liabilities and obligations for the
performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such
performance is then required or contingent, or amounts
are liquidated or determinable) owing by Borrowers to
Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or
other instrument, arising under any of the Loan
Documents. This term includes, without limitation,
all principal, interest, (including, without
limitation, interest which accrues after the
commencement of any case or proceeding referred to in
Section 8.01(g) or (h)), all Fees, Charges (paid by
Lender), expenses, attorneys' fees and any other sum
chargeable to Borrowers under any of the Loan
Documents and all obligations under a "swap agreement"
(as that term is defined in 11 U.S.C. SS 101 (55))
including, without limitation, the Swap Agreement.
"Odd Lot Purchase Program" shall mean the
redemption by TLX, up to the maximum aggregate amount
of $250,000 in any Fiscal Year, of shares of TLX
common stock.
"Other Taxes" shall have the meaning
assigned to it in Section 1.11.
"Patent License" shall mean rights under any
written agreement now owned or hereafter acquired by
Borrowers granting any right with respect to any
invention on which a Patent is in existence.
"Patents" shall mean all of the following in
which Borrowers now holds or hereafter acquires any
interest: (i) all letters patent of the United States
or any other country, all registrations and recordings
thereof, and all applications for letters patent of
the United States or any other country, including
registrations, recordings and applications in the
United States Patent and Trademark Office or in any
similar office or agency of the United States, any
State or Territory thereof, or any other country, and
(ii) all reissues, divisions, continuations,
continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit
Guaranty Corporation or any successor thereto.
"Pension Plan" shall mean an employee
pension benefit plan, as defined in Section (3) (2) of
ERISA (other than a Multiemployer Plan), which is not
an individual account plan, as defined in section 3
(34) of ERISA, and which Borrowers or, if a Title IV
Plan or any ERISA Affiliate maintains, contributes to
or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Permitted Acquisition" shall mean an
acquisition (unrelated to the movie theater business)
by Borrowers or any of their Subsidiaries of the
assets or capital stock of a Person provided that
(1) no Event of Default exists or would be caused by
the consummation of such acquisition, (2) the
consideration (both cash and non-cash) paid for any
single acquisition shall not exceed $2,000,000 or
$4,000,000 in the aggregate for all acquisitions
(except those related to the acquisition of movie
theatre or multi-media operations) in any Fiscal Year.
"Permitted Encumbrances" shall mean the
following encumbrances: (i) Liens for taxes or
assessments or other governmental Charges or levies,
either not yet due and payable or to the extent that
nonpayment thereof is permitted by the terms of
Section 5.02 of this Agreement; (ii) pledges or
deposits securing obligations under worker's
compensation, unemployment insurance, social security
or public liability laws or similar legislation; (iii)
pledges or deposits securing bids, tenders, contracts
(other than contracts for the payment of money) or
leases to which Borrowers is a party as lessee made in
the ordinary course of business; (iv) deposits
securing public or statutory obligations of Borrowers;
(v) inchoate and unperfected workers', mechanics',
suppliers' or similar liens arising in the ordinary
course of business; (vi) carriers', warehousemen's or
other similar possessory liens arising in the ordinary
course of business and securing indebtedness not yet
due and payable in an outstanding aggregate amount not
in excess of $100,000 in the aggregate at any time;
(vii) deposits securing, or in lieu of, surety, appeal
or customs bonds in proceedings to which Borrowers is
a party; (viii) any attachment or judgment lien,
unless the judgment it secures shall not, within 30
days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not
have been discharged within 30 days after the
expiration of any such stay; (ix) zoning restrictions,
easements, licenses, or other restrictions on the use
of real property or other minor irregularities in
title (including leasehold title) thereto, so long as
the same do not materially impair the use, value, or
marketability of such real property, leases or
leasehold estates, (x) liens, mortgages or security
interests in connection with purchase money
indebtedness incurred in the ordinary course of
business, and (xi) liens, mortgages or security
interest in connection with the financing, purchase,
construction or lease of movie theaters upon
reasonable notice to Lender.
"Person" shall mean any individual, sole
proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation,
institution, public benefit corporation, entity or
government (whether federal, state, county, city,
municipal or otherwise, including, without limitation,
any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean, with respect to Borrowers
or any ERISA Affiliate, at any time, an employee
benefit plan, as defined in Section 3(3) of ERISA,
which Borrowers maintains, contributes to or has an
obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Proceeds" shall mean "proceeds," as such
term is defined in the Code and, in any event, shall
include, with respect to any Person, (i) any and all
proceeds of any insurance, indemnity, warranty or
guaranty payable to such Person from time to time with
respect to any of its property or assets, (ii) any and
all payments (in any form whatsoever) made or due and
payable to such Person from time to time in connection
with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of such
Person's property or assets by any governmental body,
authority, bureau or agency (or any person acting
under color of governmental authority), (iii) any
claim of such Person against third parties (a) for
past, present or future infringement of any Patent or
Patent License or (b) for past, present or future
infringement or dilution of any Trademark or Trademark
License or for injury to the goodwill associated with
any Trademark, Trademark registration or Trademark
licensed under any Trademark License, (iv) any
recoveries by such Person against third parties with
respect to any litigation or dispute concerning any of
such Person's property or assets, and (v) any and all
other amounts from time to time paid or payable under
or in connection with any of such Person's property or
assets, upon disposition or otherwise.
"Projections" shall mean the projections
referred to in paragraph II of Schedule 3.4.
"Property" shall have the meaning assigned
to it in Section 5.14.
"Qualified Plan" shall mean an employee
pension benefit plan, as defined in Section 3(2) of
ERISA, which is intended to be tax-qualified under
Section 401(a) of the IRC, and which Borrowers or any
ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Reference Banks" means four major banks in
the London interbank market.
"Regulatory Change" shall mean, with respect
to Lender, any change after the date of this Agreement
in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the
adoption or making after such date of any
interpretation, directive or request applying to a
class of lenders including Lender of or under any
Federal, state or foreign law or regulations by any
court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Release" shall mean, as to any Person, any
release or any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing or migrating of a
Hazardous Material into the indoor or outdoor
environment by such Person (or by a person under such
Person's direction or control), including the movement
of a Hazardous Material through or in the air, soil,
surface water, ground water or property; but shall
exclude any release, discharge, emission or disposal
in material compliance with a then effective permit or
order of a Governmental Authority otherwise not in
violation of Applicable Law.
"Rental Equipment" shall mean Equipment
manufactured by one of the Borrowers and leased to
customers.
"Reportable Event" shall mean any of the
events described in Section 4043(b) (1), (2), (3),
(5), (6), (8) or (9) of ERISA.
"Representative Amount" means an amount that
is representative for a single transaction in the
relevant market at the relevant time.
"Reset Date" means quarterly on the first of
each quarter, starting October 1, 1995, through and
including July 1, 2002, subject to the Modified
Following Business Day Convention.
"Restricted Payment" shall mean, with
respect to any Person, (i) the declaration or payment
of any dividend or the occurrence of any liability to
make any other payment or distribution of cash or
other property or assets in respect of such Person's
Stock, excluding dividends from one Subsidiary to
another or to TLX and excluding cash dividends by TLX
which do not exceed $750,000 in the aggregate in any
Fiscal Year, (ii) except for (A) the Odd Lot Purchase
Program, (B) the purchase of shares of the common
stock of TLX in the aggregate amount of up to $750,000
in any Fiscal Year, and (C) in respect of the Stock
Option Plans, any payment on account of the purchase,
redemption, defeasance or other retirement of such
Person's Stock or any other payment or distribution
made in respect thereof, either directly or
indirectly, or (iii) any payment, loan, contribution,
or other transfer of funds or other property to any
Stockholder of such Person in their capacity as
Stockholders as opposed to employees, directors or
consultants; provided, however, that no Event of
Default exists or would be caused by the making of a
Restricted Payment.
"Retiree Welfare Plan" shall refer to any
Welfare Plan providing for continuing coverage or
benefits for any participant or any beneficiary of a
participant after such participant's termination of
employment, other than continuation coverage provided
pursuant to Section 4980B of the IRC and at the sole
expense of the participant or the beneficiary of the
participant.
"Revolving Credit Portion" shall mean the
period commencing on the Closing Date and continuing
through and including the Loan C Commitment
Termination Date during which the outstanding balance
of Loan C shall bear annual interest as set forth in
Schedule 1.2.
"Security Agreement" shall mean the Security
Agreements, substantially in the form of Exhibit "C",
between Lender and each of the Borrowers, as from time
to time amended, supplemented or modified.
"Schedule of Documents" shall mean the
schedule attached hereto as Annex B, including all
appendices, exhibits or schedules thereto, listing
certain documents and information to be delivered in
connection with the Loan Documents and the
transactions contemplated thereunder.
"Solvent" and "Solvency" mean, with respect
to any Person on a particular date, that on such date
(a) the fair value of the property of such Person is
greater than the total amount of liabilities, of such
Person, (b) the present fair salable value of the
assets of such Person is not less than the amount that
will be required to pay the probable liability of such
Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and
liabilities mature and (d) such Person is not engaged
in business or a transaction, and is not about to
engage in business or a transaction, for which such
Persons's property would constitute an unreasonably
small capital.
"Stock" shall mean all shares, options,
warrants, general or limited partnership interests,
participation or other equivalents (regardless of how
designated) of or in a corporation, partnership or
equivalent entity whether voting or nonvoting,
including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934,
as amended).
"Stock Option Plans" shall mean the
Incentive Stock Option Plan II, the 1989 Non-Employee
Director Stock Option Plan, the 1992 Stock Option Plan
and the 1995 Stock Option Plan.
"Stockholder" shall mean each holder of
Stock of Borrowers as set forth on Schedule 3.9.
"Subordinated Indebtedness" shall mean
Indebtedness which is subordinate in payment and
priority to indebtedness of the Loans.
"Subject Property" shall mean all real
property owned, leased or operated by any of the
Borrowers or any Subsidiary or Affiliate.
"Subsidiary" shall mean, with respect to any
Person, (i) any corporation of which an aggregate of
50% or more of the outstanding Stock having ordinary
voting power to elect a majority of the board of
directors of such corporation (irrespective of
whether, at the time, Stock of any other class or
classes of such corporation shall have or might have
voting power by reason of the happening of any
contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person and/or
one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote
or designate the vote of 50% or more of such Stock
whether by proxy, agreement, operation of law or
otherwise and (ii) any partnership in which such
Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting
or participation in profits or capital contribution)
of 50% or more or of which any such Person is a
general partner or may exercise the powers of a
general partner.
"Swap Agreement" shall mean the Master
Agreement dated on or about the Closing Date (together
with all Exhibits and Schedules) between Lender and
Borrowers in the form of the attached Exhibit "E".
"Taxes" shall mean taxes, levies, imposts,
deductions, Charges or withholdings, and all
liabilities with respect thereto, excluding franchise
taxes and taxes imposed on or measured by the net
income of the Lender by the United States, the
jurisdiction under the laws of which Lender is
organized or the jurisdiction in which Lender's
applicable lending office is located or, in each case,
any political subdivision thereof.
"Term Credit Portion" shall mean the period
commencing on the Loan C Commitment Termination Date
and continuing through and including the Loan C
Maturity Date during which the outstanding balance of
Loan C shall bear annual interest as set forth in
Schedule 1.2.
"Term Loan Maturity Date" shall mean August
27, 2002.
"Title IV Plan" shall mean a Pension Plan,
other than a Multiemployer Plan, which is covered by
Title IV of ERISA.
"TLCC" shall mean Trans-Lux Consulting
Corporation, a Delaware corporation.
"TLM" shall mean Trans-Lux Montezuma
Corporation, a New Mexico corporation.
"TLSC" shall mean Trans-Lux Sign
Corporation, a Delaware corporation.
"TLX" shall mean Trans-Lux Corporation, a
Delaware corporation.
"Trademark License" shall mean rights under
any written agreement now owned or hereafter acquired
by Borrowers granting any right to use any Trademark
or Trademark registration.
"Trademarks" shall mean all of the following
now owned or hereafter acquired by Borrowers: (i) all
common law and statutory trademarks, trade names,
corporate names, business names, trade styles, service
marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of
like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof,
and all applications in connection therewith,
including registrations, recordings and applications
in the United States Patent and Trademark Office or in
any similar office or agency of the United States, any
State or Territory thereof, or any other country or
any political subdivision thereof, (ii) all reissues,
extensions or renewals thereof, and (iii) all licenses
thereunder and together with the goodwill associated
with and symbolized by such trademark.
"Transaction Expenses" shall mean the
expenses described in Section 10.2.
"Treasury Rate" shall mean the rate
(rounded upward to the nearest 1/16 of one percent) of
U.S. Treasury Notes having a constant maturity of
seven years.
"Unfunded Pension Liability" shall mean, at
any time, the aggregate amount, if any, of the sum of
(i) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the
fair market value of all assets of such Title IV Plan
allocable to such benefits in accordance with Title IV
of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the
actuarial assumptions in effect under such Title IV
Plan, and (ii) for a period of five (5) years
following a transaction reasonably likely to be
covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by
Borrowers, an Other Designated Subsidiary or any ERISA
Affiliate as a result of such transaction.
"USD-LIBOR-BBA" means that the rate for a
Reset Date will be the rate for deposits in U.S.
Dollars for a period of 90 days which appears on the
Telerate Page 3750 as of 11:00 a.m. London time, on
the day that is two Banking Days preceding that Reset
Date. If such rate does not appear on the Telerate
Page 3750, the rate for that Reset Date will be
determined as if the parties had specified "USD-LIBOR-
Reference Banks" as the applicable Floating Rate
Option.
"USD-LIBOR-Reference Banks" means that the
rate for a Reset Date will be determined on the basis
of the rates at which deposits in U.S. Dollars are
offered by the Reference Banks at approximately 11:00
a.m., London time, on the day that is two Banking Days
preceding that Reset Date to prime banks in the London
interbank market for a period of 90 days commencing on
that Reset Date and in a Representative Amount.
Lender will request the principal London office of
each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are
provided, the rate for the Reset Date will be the
arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for
that Reset Date will be the arithmetic mean of the
rates quoted by major banks in New York City, selected
by Lender, at approximately 11:00 a.m., New York City
time, on that Reset Date for loans in U.S. Dollars to
leading European banks for a period of one month
commencing on that Reset Date and in a Representative
Amount.
"Welfare Plans" shall mean any welfare plan,
as defined in Section 3(1) of ERISA, which is
maintained or contributed to by Borrowers or any ERISA
Affiliate.
"Withdrawal Liability" shall mean, at any
time, the aggregate amount of the liabilities, if any,
pursuant to Section 4201 of ERISA, and any increase in
contributions pursuant to Section 4243 of ERISA with
respect to all Multiemployer Plans.
Any accounting term used in this Agreement
shall have, unless otherwise specifically provided
herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise
specifically provided herein, in accordance with GAAP
consistently applied as of the date of this Agreement.
That certain items or computations are explicitly
modified by the phrase "in accordance with GAAP" shall
in no way be construed to limit the foregoing. All
other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have
the meanings provided for by the Code as in effect in
the State of New York to the extent the same are used
or defined therein. The words "herein," "hereof" and
"hereunder" or other words of similar import refer to
the Agreement as a whole, including the Annexes,
Exhibits and Schedules hereto, as the same may from
time to time be amended, modified or supplemented, and
not to any particular section, subsection or clause
contained in this Agreement.
Wherever from the context it appears
appropriate, each term stated in either the singular
or plural shall include the singular and the plural,
and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, the
feminine and the neuter.
ANNEX B
to
CREDIT AGREEMENT
Dated as of August 28, 1995
SCHEDULE OF CLOSING DOCUMENTS
The obligation of Lender to extend the Loans is
subject to satisfaction of the conditions precedent
that Lender shall have received the following, each,
unless otherwise specified below, dated the Closing
Date, in form and substance satisfactory to Lender and
its counsel, unless otherwise specified below:
I. PRINCIPAL LOAN DOCUMENTS.
(a) Credit Agreement. The Credit Agreement
duly executed by Borrowers.
(b) Notes. Duly executed Notes to the
order of Lender.
(c) Notice of Revolving Credit Advance. An
original Notice of Revolving Credit Advance, duly
executed by the Chief Executive Officer or Chief
Financial Officer of TLX.
(d) Swap Agreement. The Swap Agreement
duly executed by the Borrowers.
II. COLLATERAL DOCUMENTS.
(a) Security Agreement. The Security
Agreement duly executed by each of the Borrowers,
together with delivery to Lender of:
(i) Acknowledgement copies of proper
Financing Statements on Form UCC-l (the
"Financing Statements") duly filed under the
Uniform Commercial Code, or chattel mortgages
duly filed under other applicable law, of all
jurisdictions as may be necessary or, in the
opinion of Lender, desirable to perfect the Liens
created by the Security Agreement;
(ii) Certified copies of Requests for
Information (Form UCC-11), or other evidence
satisfactory to Lender, listing the Financing
Statements or chattel mortgages referred to in
paragraph (i) above and all other effective
financing statements or chattel mortgages which
name Borrowers (under their present name, any
previous name or any trade or doing business
name) as debtor and which are filed in the
jurisdictions referred to in said paragraph (i)
above, together with copies of such other
financing statements (none of which shall cover
the Collateral purported to be covered by the
Security Agreement);
(iii) Agreements relating to the
granting of a security interest in Patents,
Trademarks and Copyrights in a form suitable for
filing with the appropriate Federal filing office
by each of the Borrowers (other than TLX);
(iv) Evidence of the completion of all
other recordings and filings as may be necessary
or, in the opinion of and at the request of
Lender, desirable to perfect the Liens created by
the Security Agreement;
(v) Evidence that the insurance
required by the terms of the Security Agreement
and hereunder is in full force and effect; and
(vi) Duly executed notices from
Borrowers (other than TLX) to each Person listed
on Schedule 3.2 of Lender's Lien on Borrower's
Inventory delivered to such Person from time to
time.
(b) Guaranties. The Guaranties duly
executed by each Guarantor.
(c) Lease Summary. A summary of Leases in
the form described in subsection (c) on Annex D.
(d) Certain agreements and instruments in
connection iwth the grant of a mortgage by one or more
of Borrowers to Lender of certain parcels of real
property.
III. THIRD PARTY AGREEMENTS.
Landlord Consents. Duly executed agreements
from the landlords of TLX's locations in Skokie, IL,
New York, NY, Dallas, TX, and Las Vegas, NV.
Borrowers agree to use reasonable efforts to deliver
the Landlord Consents within 60 days after the Closing
Date.
IV. DOCUMENTS DELIVERED BY BORROWERS.
(a) Board Resolutions and Incumbency
Certificates. A certificate of the Secretary or an
Assistant Secretary of each of the Borrowers
certifying (A) the resolutions adopted by the Board of
Directors of each of the Borrowers approving each Loan
Document to which any of the Borrowers is a party and
the transactions contemplated hereby and thereby, (B)
all documents evidencing other necessary corporate
action by Borrowers and required governmental and
third party approvals with respect to each such Loan
Document, and (C) the names and true signatures of the
authorized officers of Borrowers.
(b) Articles of Incorporation; By-Laws and
Good Standing Certificates. The certificate of
incorporation or the foreign equivalent thereof of
each of the Borrowers as in effect on the Closing
Date, certified by the Secretary of State or other
appropriate authority of the State of its
incorporation, together with a recent good standing
certificate or the foreign equivalent thereof from
such Secretary of State or other appropriate
authority, and the by-laws or the foreign equivalent
thereof of each of the Borrowers as in effect on the
Closing Date, certified by the Secretary, Assistant
Secretary or other appropriate officer or director of
each of the Borrowers or a certification that there
has been no changes since [January 17, 1995].
(c) Solvency. A certificate in form and
substance satisfactory to Borrowers, signed by the
chief financial officer of Borrowers, certifying as to
the Solvency of Borrowers, on a consolidated basis,
after giving effect to the entering into of the, the
Loan Documents, the Loans hereunder and the other
transactions contemplated hereby.
(d) Financial Statements. To the extent
not delivered previously to Lender, copies of the
financial statements described in Schedule 3.4.
(e) Projections. To the extent not
delivered previously to Lender, copies of the
Projections described in Schedule 3.4 in form and
substance satisfactory to Lender.
(f) Environmental Reviews and Audits. All
Environmental Reviews and Audits and other information
pertaining to actual or potential environmental claims
as Lender may require.
(g) Appraisals. All appraisals for any
Subject Property.
V. LEGAL OPINIONS.
(a) Legal Opinions. An opinion of counsel
to Borrowers, the Individual Guarantors, in form and
substance satisfactory to Lender (which shall include
an opinion as to enforceability of the Loan Documents
under Connecticut law and the validity, binding effect
and enforceability of Liens and other matters, and
such other matters incident to the transactions
contemplated hereby as Lender may reasonably require).
ANNEX C
to
CREDIT AGREEMENT
Dated as of August 28, 1995
SCHEDULE OF CERTAIN FEES
1. The amount of $80,000 in consideration of
Lender's extension of Loan A.
2. The amount of $75,810 in consideration of
Lender's extension of Loan B.
3. An unused facility fee (the "Non-use Fee")
payable to Lender equal to one-half of one percent
(0.50%) per annum on the average unused daily balance
of Loan C, payable in arrears (i) for the preceding
calendar quarter, on the first day of each calendar
quarter commencing October 1, 1995, and (ii) on the
Loan C Commitment Termination Date.
With respect to the fees described under clauses
1 and 2 above, Borrowers acknowledge that the amount
of $50,000 shall be deemed an investment banking fee
which was paid by Borrowers prior to the Closing Date;
the amount of $105,810 is due and payable
simultaneously with the execution and delivery of this
Agreement. All computations of the foregoing fees
shall be made by Lender and on the basis of a 365-day
year, in each case for the actual number of days
occurring in the period for which such fee is payable.
ANNEX D
to
CREDIT AGREEMENT
Dated as of August 28, 1995
FINANCIAL STATEMENTS, PROJECTIONS AND NOTICES
(a) Promptly upon filing thereof, a copy of
the Report on Form 10-Q from TLX together with a
certificate of the Chief Financial Officer of the
Borrowers that such financial statements contained
therein and present fairly in accordance with GAAP the
consolidated financial position and the consolidated
results of operations and the consolidated statements
of cash flow of the Borrowers as at the end of such
Fiscal Quarter and for the period then ended, and that
there was no Default in existence as of such time.
(b) Promptly upon filing thereof, a copy of
the Report on Form 10-K together with (i) a statement
in reasonable detail showing the calculations used in
determining Borrowers' compliance with the financial
covenants set forth in Section 6.11, (ii) a
certification of the Chief Executive Officer or Chief
Financial Officer of Borrowers that all such financial
statements present fairly in accordance with GAAP the
cash flows, the results of operations and the balance
sheet of Borrowers and their Subsidiaries as at the
end of such Fiscal Year and for the period then ended
and that, to their knowledge, there was no Default in
existence as of such time.
(c) No later than 100 days after the end of
each Fiscal Year, TLX shall deliver to Lender, in form
and content acceptable to Lender, a detailed summary
of all Leases to which any Borrower is the lessor,
which summary shall include, without limitation, (i)
the name and address of the lessee, (ii) the term of
the Lease (if available) and the expiration date of
such Lease, (iii) the monthly payment under such
Lease, (iv) the aggregate unpaid remaining Lease
payments, and (v) whether such Lease covers Inventory
or Equipment. No later than 50 days after the end of
each Fiscal Quarter, a summary of changes from the
summary delivered for the preceding Fiscal Year.
(d) As soon as practicable, but in any
event within five (5) Business Days after Borrowers
become aware of the existence of any Default, or any
development or other information which would have a
Material Adverse Effect, telephonic or telegraphic
notice specifying the nature of such Default or
development or information, including the anticipated
effect thereof, which notice shall be promptly
confirmed in writing within five (5) days.
(e) Upon Lender's request, copies of all
federal, state, local and foreign tax returns,
information returns and reports in respect of income,
franchise or other taxes on or measured by income
(excluding sales, use or like taxes) filed by
Borrowers or any Subsidiary thereof.
(f) Promptly upon the issuance thereof,
copies of all reports to the Securities and Exchange
Commission or any other governmental agency or any
securities exchange located in the United States of
America where TLX or any Subsidiary is listed, and all
reports, notices or statements sent to its
stockholders or to the holders of any Indebtedness or
to the trustee under any indenture under which the
same is issued.
(g) As soon as possible, and in any event
within ten days after Borrowers know or have reason to
believe that any of the events or conditions specified
below with respect to any Plan or Multiemployer Plan
has occurred or exists with respect to Borrowers or
any of their Subsidiaries, a statement signed by a
senior officer of Borrowers setting forth details
respecting such event or condition and the action, if
any, that Borrowers, any Subsidiary thereof or any
ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be
filed with or given to PBGC by Borrowers, any
Subsidiary thereof or any ERISA Affiliate with respect
to such event or condition):
(i) any reportable event, as defined
in Section 4043(b) of ERISA and the regulations
issued thereunder, with respect to a Plan, as to
which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of
such event (provided that a failure to meet the
minimum funding standard of Section 412 of the
IRC or Section 302 of ERISA shall be a reportable
event regardless of the issuance of any waivers
in accordance with Section 412(d) of the IRC);
(ii) the filing under Section 4041 of
ERISA of a notice of intent to terminate any Plan
or the termination of any Plan;
(iii) the institution by PBGC of
proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by
Borrowers, any Subsidiary thereof or any ERISA
Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with
respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal
by Borrowers, any Subsidiary thereof or any ERISA
Affiliate under Section 4201 or 4204 of ERISA
from a Multiemployer Plan, or the receipt by
Borrowers, any Subsidiary thereof or any ERISA
Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under
Section 4041A of ERISA; and
(v) the institution of a proceeding by
a fiduciary of any Multiemployer Plan against
Borrowers, any Subsidiary thereof or any ERISA
Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days.
(h) Such other reports and information
respecting Borrowers' business, financial condition or
prospects as Lender may, from time to time, reasonably
request.
ANNEX E
to
CREDIT AGREEMENT
Dated as of August 28, 1995
INSURANCE REQUIREMENTS
I. Coverage Requirements. The insurance
policies maintained by Borrowers provide for, without
limitation, the following insurance coverage:
(a) "All Risk" physical damage insurance on
all of Borrowers' tangible real and personal property
and assets, wherever located, including without
limitation, Inventory located at premises not owned or
leased by Borrowers (up to the amount of $200,000) and
covers, without limitation, fire and extended
coverage, boiler and machinery coverage, flood and
earthquake, (up to $1,000,000 with the exception of
California) theft, burglary, explosion, collapse, and
all other hazards and risks ordinarily insured against
by owners or users of such properties in similar
businesses. All policies of insurance on such real
and personal property contain an endorsement, in form
and substance acceptable to Lender, showing loss
payable to Lender (Form 438 BFU or its equivalent) and
extra expense and business interruption endorsements.
Such endorsement, or an independent instrument
furnished to Lender, provides that the insurance
companies will give Lender at least thirty (30) days
prior written notice before any such policy or
policies of insurance shall be altered or canceled and
that no act or default of Borrowers or any other
Person shall affect the right of Lender to recover
under such policy or policies of insurance in case of
loss or damage;
(b) Comprehensive general liability
insurance on an "occurrence basis" against claims for
personal injury, bodily injury and property damage
with a minimum limit of $1,000,000 per occurrence and
$2,000,000 in the aggregate. Such coverage includes,
without limitation, premises/operations, broad form
contractual liability, underground, explosion and
collapse hazard, independent contractors, broad form
property coverage, products and completed operations
liability;
(c) Statutory limits of, worker's
compensation insurance which includes employee's
occupational disease and employer's liability in the
amount of $500,000 for each accident or occurrence;
(d) Automobile liability insurance for all
owned, non-owned or hired automobiles against claims
for personal injury, bodily injury and property
damage with a minimum combined single limit of
$1,000,000 per occurrence;
(e) Umbrella insurance of $25,000,000 per
occurrence and $25,000,000 in the aggregate;
(f) Business Interruption insurance in the
amount of $3,000,000 (except that the amount shall be
$400,000 for the theatre operations);
(g) Crime insurance with respect to
employee dishonesty in the amount of $100,000 (except
for employee theft from benefit plans which shall be
in the amount of $375,000); and
(h) Fiduciary liability insurance with
respect to defined benefit and group welfare plans in
the amount of $3,000,000.
All of such policies (i) shall have
deductibles acceptable to Lender; (ii) shall provide
that Lender will be notified by written notice at
least thirty (30) days prior to such policy's
cancellation or material modification; (iii) are in
full force and effect; (iv) are in form and with
insurers recognized as adequate by Lender (insurers
with an A.M. Best rating lower than "A" will not be
considered adequate); and (v) provide coverage of such
risks and for such amounts as is customarily
maintained for businesses of the scope and size of
Borrowers and as otherwise acceptable to Lender. Each
insurance policy contains a clause which provides that
Lender's interest under such policy shall not be
invalidated by any act or omission to act of, or any
breach of warranty by, the insured, or by the use of
the property for purposes more hazardous than is
permitted in such policy. Borrowers have delivered to
Lender a certificate of insurance that evidences the
existence of each policy of insurance, payment of all
premiums therefor and compliance with all provisions
of this Agreement.
SCHEDULE 1.1
to
CREDIT AGREEMENT
Dated as of August 28, 1995
LOANS
(a) (i) Loan A. Upon and subject to the terms
of the Credit Agreement, Lender agrees to make Loan A
to TLX, ISE and TLM on the Closing Date. Amounts
repaid under Loan A may not thereafter be reborrowed.
Loan A shall be evidenced by Note A dated the Closing
Date.
(ii) Loan B. Upon and subject to the terms
of the Credit Agreement, Lender agrees to make Loan B
to TLX, ISE, TLCC and TLSC on the Closing Date.
Amounts repaid under Loan B may not thereafter be
reborrowed. Loan B shall be evidenced by Note B dated
the Closing Date.
(iii) Loan C. (A) Upon and subject to
the terms of the Credit Agreement, Lender agrees to
make Loan C to TLX on the Closing Date in an aggregate
principal amount at any time outstanding not to exceed
$4,000,000. So long as a Default or an Event of
Default does not then exist, TLX may borrow, repay and
reborrow amounts under Loan C. Loan C shall be
evidenced by Note C dated the Closing Date.
(B) TLX shall give Lender notice of
each borrowing under Loan C as provided in subsection
(C) below and, subject to subsection (C) below, on the
date specified for such borrowing, Lender shall make
available the amount of such borrowing in immediately
available funds for the account of TLX.
(C) Each notice of a borrowing under
Loan C shall be given in writing (by facsimile, hand
delivery or U.S. Mail) by TLX to Lender at the address
set forth in Section 10.10 of the Credit Agreement no
later than 1:00 pm (Hartford, Connecticut time) on the
Business Day of the proposed borrowing. Each such
notice of borrowing (a "Notice of Revolving Credit
Advance") shall be substantially in the form of
Exhibit D hereto and Lender shall be entitled to rely
upon and shall be fully protected under the Credit
Agreement in relying upon any Notice of Revolving
Credit Advance believed by Lender to be genuine and to
assume that the persons executing and delivering the
same were duly authorized unless a responsible
individual acting thereon for Lender shall have actual
knowledge to the contrary.
(D) In the event that the outstanding
balance of Loan C shall, at any time, exceed the
amount of $4,000,000, TLX agrees to immediately repay
Loan C in the amount of such excess; notwithstanding,
the foregoing, such excess balance shall nevertheless
constitute Obligations that are secured by the
Collateral and entitled to all of the benefits thereof
and of the Loan Documents and shall be evidenced by
Note C.
(E) TLX shall have the right any time
on 30 days' prior written notice to Lender to
voluntarily terminate Loan C (in whole but not in
part) without premium or penalty. Upon such
termination, TLX's right to receive borrowings under
Loan C shall simultaneously terminate and TLX's
obligation to pay the Non-use Fee shall terminate. On
the date of such termination, all Borrowers shall pay
the Lender, in immediately available funds, all of the
Obligations including any accrued and unpaid interest
(b) The extension of the Loans on the Closing
Date shall be subject to the fulfillment of the
conditions set forth in Section 5.02 of the Credit
Agreement.
(d) In addition to all amounts required to be
paid by Borrowers hereunder, Borrowers shall pay to
Lender, upon demand by Lender, the amount or amounts
set forth in Section 1.2 of the Credit Agreement as a
result of any payment or prepayment by any Borrower of
Loan A or Loan B for any reason or an acceleration
pursuant to the Credit Agreement).
SCHEDULE 1.2
to
CREDIT AGREEMENT
Dated as of August 28, 1995
REPAYMENT OF LOANS
(a) Loan A. (i) TLX, ISE and TLM shall pay
interest on the outstanding balance of Loan A
quarterly in arrears, (A) for a period commencing on
the Closing Date and ending on July 1, 1998, at a per
annual rate equal to seven and eighty-six one
hundredths percent (7.86%), as more fully set forth in
subsection (f) below, (B) commencing July 1, 1998, and
continuing through the Term Loan Maturity Date at a
rate per annum equal to one hundred seventy-five basis
points (1.75%) above USD-LIBOR-BBA, and (C) if any
interest remains payable after the Term Loan Maturity
Date, upon demand; provided, however, that on June 1,
1998, the obligors under such Loan shall have the
right to request a fixed rate of interest for the
remaining term of such Loan and, provided that Lender
at such time regularly offers fixed interest rates for
loans similar to such Loan, Lender agrees to act
reasonably with respect to such request.
(ii) The aggregate principal amount of Note A
shall be payable in quarterly installments (consisting
of principal) as follows:
Payment Date Amount of Payment
October 1, 1995 - July 1, 2002 $ 133,333
August 27, 2002 $4,266,677
(b) Loan B. (i) TLX, ISE, TLCC and TLSC shall
pay interest on the outstanding balance of Loan B,
quarterly in arrears (A) for a period commencing on
the Closing Date and ending on July 1, 1998, at a per
annum rate equal to seven and eighty-six one
hundredths percent (7.86%), as more fully set forth in
subsection (f) below, (B) commencing July 1, 1998, and
continuing through the Term Loan Maturity Date at a
rate per annum equal to one hundred seventy-five basis
points (1.75%) above USD-LIBOR-BBA, and (C) if any
interest remains payable after the Term Loan Maturity
Date, upon demand; provided, however, that on June 1,
1998, the obligors under such Loan shall have the
right to request a fixed rate of interest for the
remaining term of such Loan and, provided that Lender
at such time regularly offers fixed interest rates for
loans similar to such Loan, Lender agrees to act
reasonably with respect to such request.
(ii) The aggregate principal amount of Note B
shall be payable in quarterly installments (consisting
of principal only) as follows:
Payment Date Amount of Payment
October 1, 1995 - July 1, 2002 $270,750
(c) Loan C. (i) During the Revolving Credit
Portion, TLX shall pay interest on the outstanding
balance of Loan C at an annual interest rate equal to
two hundred basis points (2.00%) above USD-LIBOR-BBA,
as more fully set forth in subsection (f) below.
(ii) During the Term Credit Portion,
TLX shall pay interest on the outstanding balance of
Loan C at an annual interest rate equal to two hundred
twenty-five basis points (2.25%) above USD-LIBOR-BBA,
as more fully set forth in subsection (f) below;
provided, however, that on a date thirty (30) days
prior to the Loan C Commitment Termination Date, TLX
shall have the right to request a fixed rate of
interest for the Term Credit Portion and, provided
that Lender at such time regularly offers fixed
interest rates for loans similar to the Term Credit
Portion, Lender agrees to act reasonably with respect
to such request. If any interest remains payable
after the Loan C Maturity Date, such interest shall be
payable upon demand.
(iii) On June 30, 1997, the then
outstanding indebtedness under Note C shall be payable
in nineteen (19) equal payments each in the amount of
one-twentieth (1/20th) of the amount then outstanding
under Note C, payable on October 1, 1997, and
continuing on the first day each successive Fiscal
Quarter and a final payment on June 30, 2002 of all
amounts then outstanding under Note C.
(d) Interest on each of the Loans shall be
calculated on the basis of the actual number of days
elapsed over a 365-day year.
(e) If any interest or other payment under any
of the Loans becomes due and payable on a day other
than a Business Day, the required payment thereof
shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate
during such extension. Upon the failure of Borrowers
to make required payments under any of the Notes on
the date due (after the expiration of any applicable
grace period), Lender shall have the right to directly
charge any Borrower's account maintained with Lender
for the amount of such required payment.
(f) With respect to indebtedness under the Loans
which bears interest tied to USD-LIBOR-BBA, Borrowers
shall pay such interest quarterly in arrears on the
sooner to occur of (x) the next preceding Business Day
immediately prior to a Reset Date and (y) the last day
of each Fiscal Quarter.
(g) Lender may collect a late charge of four
percent (4%) of any installment of principal, interest
or other amount not contested in good faith by
Borrowers due to Lender which is not paid by Borrowers
within 10 days after the due date thereof to cover the
extra expense involved in handling such delinquent
payment and Borrowers agrees that such amount is
reasonable; however, such late charge shall not affect
Lender's right to exercise any of its rights and
remedies provided in the Credit Agreement if an Event
of Default has occurred.
SCHEDULE 1.3
to
CREDIT AGREEMENT
Dated as of August 28, 1995
USE OF PROCEEDS
1. Loan A: (a) Satisfaction or refinance of
all indebtedness (i) outstanding under an
industrial revenue bond obligation of TLX
having an outstanding principal balance of
approximately $600,000 as evidenced by the
Promissory Note dated July 20, 1982, (ii)
outstanding under the obligation of TLX to
Lender and The Bank of New York having an
outstanding principal balance of
approximately $488,000 as evidenced by the
Promissory Note dated November 15, 1978,
(iii) outstanding under the obligation of
TLX to Lender in connection with the credit
facility to redeem certain of TLX's
subordinated debentures having an
outstanding principal balance of
approximately $2,850,000 as evidenced by the
Promissory Note dated October 17, 1994, (iv)
outstanding under the obligation of ISE to
Lender having an outstanding principal
balance of approximately $787,000 as
evidenced by the Promissory Note dated
January 17, 1995, (v) outstanding under the
obligation of ISE to Lender having an
outstanding principal balance of
approximately $2,375,000 as evidenced by the
Promissory Note dated January 17, 1995, and
(vi) to the extent of approximately
$900,000, outstanding under the obligation
of TLCC and TLSC to Lender having an
outstanding principal balance of
approximately $8,568,000 as evidenced by the
Promissory Note dated November 4, 1993 (the
"TLCC/TLSC Facility")
2. Loan B: Refinance of the balance of the
TLCC/TLSC Facility.
3. Loan C: Refinance of all indebtedness
outstanding under the obligation of TLX to
Lender having an outstanding principal
balance of $300,000 as evidenced by the
Revolving Credit Promissory Note dated April
9, 1992.
SCHEDULE 3.4
to
CREDIT AGREEMENT
Dated as of August 28, 1995
FINANCIAL STATEMENTS AND PROJECTIONS
I. Financial Statements. All of the following
balance sheets and statements of income and cash flows
of Borrowers, on a consolidated basis, copies of which
have been furnished by Borrowers to Lender prior to
the date of the Agreement, have been, except as noted
therein, prepared in conformity with GAAP and present
fairly, in all material respects, the financial
position of Borrowers and their Subsidiaries, on a
consolidated and consolidating basis, in each case as
at the dates thereof, and the results of operations
and cash flows for the periods then ended (as to the
unaudited interim financial statements, subject to
normal year-end audit adjustments and the absence of
footnotes):
(i) the unaudited consolidated balance
sheet of Borrowers and their Subsidiaries as at June
30, 1995, and the related consolidated and
consolidating statement of income and cash flows for
the six Fiscal Months ending June 30, 1995; and
(ii) the audited and certified consolidated
balance sheet of Borrowers and their Subsidiaries as
of December 31, 1994, and 1993, and the consolidated
statement of income and cash flows for the year then
ended.
II. Projections. The projections of operating
budgets, balance sheets and cash flow statements on a
consolidated basis for Borrowers on an annual basis,
for the period ending December 31, 1995 through
December 31, 1998 (collectively, the "Projections"),
copies of which have been delivered by Borrowers to
Lender, disclose all assumptions made with respect to
general economic, financial and market conditions in
formulating such Projections. To the best knowledge
of Borrowers, no facts exist which would result in any
material change in any of such Projections. The
Projections are based upon reasonable estimates and
assumptions, all of which are fair in light of current
conditions, and reflect the reasonable estimate of
Borrowers and their Subsidiaries of the results of
operations and other information projected therein.
SCHEDULE 6.11
to
CREDIT AGREEMENT
Dated as of August 28, 1995
FINANCIAL COVENANTS
1. Capital Expenditures. (a) TLX, on a
consolidated basis, shall expend during each Fiscal
Year, Capital Expenditures in an amount not less than
$3,000,000 capitalized in connection with Rental
Equipment.
(b) TLX, on a consolidated basis, shall not
expend in excess of $10,000,000 for Capital
Expenditures (including Rental Equipment but excluding
expenditures related to movie theatres) in any Fiscal
Year, which amount shall be noncumulated from year to
year.
2. Debt to Worth Ratio. TLX, on a consolidated
basis, at the end of each Fiscal Quarter, for the most
recent 12-month period, shall maintain a Debt to Worth
Ratio of not greater than the following for the period
indicated:
Period Ratio
Closing Date through September 30, 1997 1.25 to 1
December 31, 1997 through September 30, 1998 1.20 to 1
December 31, 1998 and thereafter 1.00 to 1
3. Fixed Charge Coverage Ratio. TLX, on a
consolidated basis, at the end of each Fiscal Quarter
for the most recent 12-month period, shall maintain a
Fixed Charge Coverage Ratio of not less than the
following for the period indicated:
Period Ratio
March 31, 1995 0.96 to 1
June 30, 1995 through September 30, 1996 1.00 to 1
December 31, 1996 and thereafter 1.05 to 1
4. Consolidated Tangible Net Worth. TLX shall
maintain at all times Consolidated Tangible Net Worth
in an amount not less than $18,000,000.
5. Lease Payments. TLX, on a consolidated
basis, shall not create or assume to make any
payments, whether rent or otherwise under any Lease,
rental or other arrangement (excluding Leases related
to movie theatres) in excess of $1,000,000 in the
aggregate in any Fiscal Year without the prior written
consent of Lender, which consent shall not be
unreasonably withheld.
TERM PROMISSORY NOTE
$8,000,000 As of August 28, 1995
Stamford, Connecticut
1. For value received, the undersigned, TRANS-
LUX CORPORATION, a Delaware corporation, INTEGRATED
SYSTEMS ENGINEERING, INC., a Utah corporation, and
TRANS-LUX MONTEZUMA CORPORATION, a New Mexico
corporation, (collectively, the "Maker"), jointly and
severally promise to pay to the order of FIRST
FIDELITY BANK, a Connecticut banking corporation (the
"Lender"), at its office at 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, or at such other place as the holder
hereof (including the Lender, hereinafter referred to
as the "Holder"), may designate, the principal sum of
EIGHT MILLION DOLLARS ($8,000,000), in lawful money of
the United States of America. All capitalized terms,
unless otherwise defined herein, shall have the
respective meanings assigned to such terms in the
Credit Agreement dated as of the date hereof between,
among others the Maker and the Lender (the "Credit
Agreement").
2. This Note is issued pursuant to the Credit
Agreement and is entitled to the benefit and security
of the Loan Documents to which Credit Agreement
reference is hereby made for a statement of all of the
terms and conditions under which the loan evidenced
hereby is made.
3. The principal amount of the indebtedness
evidenced hereby shall be payable in installments in
the amounts and on the dates specified in the Credit
Agreement, including, without limitation, those set
forth on Schedule "1.2" to the Credit Agreement.
Interest thereon shall be paid until such principal
amount is paid in full at such interest rates and at
such times as are specified in the Credit Agreement.
4. Upon and during the occurrence of an Event
of Default, this Note may, as provided in the Credit
Agreement, and without demand, notice or legal process
of any kind, be declared and immediately shall become,
due and payable.
5. The Maker waives diligence, demand,
presentment, protest and notice of nonpayment, protest
and any renewals or extensions of this Note.
6. This Note shall be governed by and construed
in accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of
Connecticut.
TRANS-LUX CORPORATION
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
INTEGRATED SYSTEMS ENGINEERING, INC.
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
TRANS-LUX MONTEZUMA CORPORATION
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
TERM PROMISSORY NOTE
$7,581,000 As of August 28, 1995
Stamford, Connecticut
1. For value received, the undersigned, TRANS-LUX
CORPORATION, a Delaware corporation, INTEGRATED
SYSTEMS ENGINEERING, INC., a Utah corporation, TRANS-
LUX CONSULTING CORPORATION, a Delaware corporation,
and TRANS-LUX SIGN CORPORATION, a Delaware
corporation, (collectively, the "Maker"), jointly and
severally promise to pay to the order of FIRST
FIDELITY BANK, a Connecticut banking corporation (the
"Lender"), at its office at 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, or at such other place as the holder
hereof (including the Lender, hereinafter referred to
as the "Holder"), may designate, the principal sum of
SEVEN MILLION FIVE HUNDRED EIGHTY-ONE THOUSAND DOLLARS
($7,581,000), in lawful money of the United States of
America. All capitalized terms, unless otherwise
defined herein, shall have the respective meanings
assigned to such terms in the Credit Agreement dated
as of the date hereof between, among others the Maker
and the Lender (the "Credit Agreement").
2. This Note is issued pursuant to the Credit
Agreement and is entitled to the benefit and security
of the Loan Documents to which Credit Agreement
reference is hereby made for a statement of all of the
terms and conditions under which the loan evidenced
hereby is made.
3. The principal amount of the indebtedness
evidenced hereby shall be payable in installments in
the amounts and on the dates specified in the Credit
Agreement, including, without limitation, those set
forth on Schedule "1.2" to the Credit Agreement.
Interest thereon shall be paid until such principal
amount is paid in full at such interest rates and at
such times as are specified in the Credit Agreement.
4. Upon and during the occurrence of an Event of
Default, this Note may, as provided in the Credit
Agreement, and without demand, notice or legal process
of any kind, be declared and immediately shall become,
due and payable.
5. The Maker waives diligence, demand,
presentment, protest and notice of nonpayment, protest
and any renewals or extensions of this Note.
6. This Note shall be governed by and construed in
accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of
Connecticut.
TRANS-LUX CORPORATION
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
INTEGRATED SYSTEMS ENGINEERING, INC.
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
TRANS-LUX CONSULTING CORPORATION
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
TRANS-LUX SIGN CORPORATION
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
REVOLVING PROMISSORY NOTE
$4,000,000 As of August 28, 1995
Stamford, Connecticut
1. For value received, the undersigned, TRANS-LUX
CORPORATION, a Delaware corporation (the "Maker"),
promises to pay to the order of FIRST FIDELITY BANK,
a Connecticut banking corporation (the "Lender"), at
its office at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx,
or at such other place as the holder hereof may
designate, the principal sum of the lesser of FOUR
MILLION DOLLARS ($4,000,000) or so much thereof as has
been advanced to the Maker, or is outstanding for the
account of the Maker, pursuant to the terms of the
Credit Agreement (as defined below).
2. This Note is issued pursuant to the Credit
Agreement dated as of the date hereof, between, among
others, the Maker and the Lender (as amended,
restated, supplemented or otherwise modified from
time-to-time, the "Credit Agreement"), and is entitled
to the benefit and security of the Loan Documents (as
defined therein), to which Credit Agreement reference
is hereby made for a statement of all of the terms and
conditions under which the advances under the Credit
Agreement were made.
3. The principal amount of the indebtedness
evidenced hereby shall be payable in the amounts and
on the dates specified in the Credit Agreement.
Interest thereon shall be paid until such principal
amounts are paid in full at such interest rates and at
such times as are specified in the Credit Agreement.
4. Upon and during the occurrence of an Event of
Default, this Note may, as provided in the Credit
Agreement, and without demand, notice or legal process
of any kind, be declared, and immediately shall become
due and payable.
5. The Maker waives diligence, demand,
presentment, protest and notice of nonpayment, protest
and any renewals or extensions of this Note.
6. This Note shall be governed by and construed in
accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of
Connecticut
TRANS-LUX CORPORATION
By /s/ Xxxxxx Xxxx
----------------------------------------------
Xxxxxx Xxxx
Its President
By /s/ Xxxxxx Xxxxx
----------------------------------------------
Xxxxxx Xxxxx
Its Treasurer and Chief Financial Officer
