EXHIBIT 4.2(a)
LOAN AND SECURITY AGREEMENT
between
XXXXXXX-ATLANTIC CORP.
("Borrower")
and
FIRST UNION NATIONAL BANK
("Lender")
Dated November 2, 1998
TABLE OF CONTENTS
Page
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1. Definitions; Financial and Other Terms...................................................................1
1.1. Definitions..................................................................................1
1.2. Financial Terms..............................................................................7
1.3. Other Terms..................................................................................7
2. Representations and Warranties...........................................................................7
2.1. Valid Existence and Power....................................................................7
2.2. Authority....................................................................................8
2.3. Condition....................................................................................8
2.4. Financial Statements.........................................................................8
2.5. Litigation; Government Regulation............................................................8
2.6. Agreements, Etc..............................................................................8
2.7. Authorizations...............................................................................8
2.8. Title; Collateral............................................................................9
2.9. Location and Names...........................................................................9
2.10. Taxes........................................................................................9
2.11. Labor Law Matters............................................................................9
2.12. Accounts.....................................................................................9
2.13. Use and Location of Collateral...............................................................9
2.14. Judgment Liens..............................................................................10
2.15. Intent and Effect of Transactions; Borrower's Solvency......................................10
2.16. Subsidiaries................................................................................10
2.17. Hazardous Materials.........................................................................10
2.18. ERISA.......................................................................................10
2.19. Investment Company Act......................................................................10
2.20. Use of Proceeds.............................................................................10
2.21. Trade Relations.............................................................................10
2.23. Full Disclosure.............................................................................11
3. Loans...................................................................................................11
3.1. Advances of Loans...........................................................................11
3.2 The Notes...................................................................................12
3.3 Notice and Manner of Borrowing..............................................................12
3.4. Interest....................................................................................12
3.5 Repayment of Loans..........................................................................13
3.6. Costs, Fees and Expenses....................................................................14
3.7. Prepayments.................................................................................14
3.8 Payments and Computations...................................................................14
3.9. Facility for Letters of Credit..............................................................14
3.10. Facility for Foreign Exchange...............................................................16
4. Conditions Precedent to Borrowing.......................................................................17
4.1. Advance.....................................................................................17
4.2. Conditions Precedent to Each Advance of a Loan or Issuance of a Letter of Credit or
Purchasing Forward Exchange.................................................................19
4.3. Waiver of Conditions Precedent..............................................................19
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Page
5. Covenants of the Borrower...............................................................................20
5.1. Use of Loan Proceeds........................................................................20
5.2. Maintenance of Business and Properties......................................................20
5.3. Insurance...................................................................................20
5.4. Notice of Default...........................................................................20
5.5. Inspections.................................................................................21
5.6. Financial Information.......................................................................21
5.7. Year 2000 Compatibility.....................................................................22
5.8. Liens.......................................................................................22
5.9. Redemptions.................................................................................22
5.10. Merger, Sale, Etc...........................................................................22
5.11. Loans, Guaranties and Other Investments.....................................................22
5.12. Change in Business..........................................................................23
5.13. Accounts....................................................................................23
5.14. Transactions with Affiliates................................................................23
5.15. No Change in Name or Offices; Removal of Collateral.........................................23
5.16. No Sale, Leaseback..........................................................................23
5.17. Margin Stock................................................................................23
5.18. Payment of Taxes, Etc.......................................................................23
5.19. Comply with ERISA...........................................................................23
5.20. Compliance; Hazardous Materials.............................................................24
5.21. Subsidiaries................................................................................24
5.22. Compliance with Assignment Laws.............................................................24
5.23. Further Assurances..........................................................................24
5.24. Withholding Taxes...........................................................................24
5.25. Financial Covenants.........................................................................24
5.26. Lender Account..............................................................................24
5.27. Change in Ownership of Borrower.............................................................24
5.28. Fiscal Year; Accounting Method..............................................................24
5.29. Default on Other Obligations................................................................24
5.30. NASDAQ......................................................................................25
5.31. SEC Filing..................................................................................25
6. Default.................................................................................................25
6.1. Events of Default...........................................................................25
6.2. Acceleration of the Indebtedness............................................................26
6.3. Default Rate................................................................................26
6.4. Rights and Remedies.........................................................................27
6.5. Application of Proceeds.....................................................................27
6.6. Appointment of the Lender as the Borrower's Lawful Attorney.................................28
7. Security Agreement......................................................................................28
7.1. Security Interest...........................................................................28
7.2. Inspection of Collateral....................................................................29
7.3. Other Rights................................................................................29
7.4. Tangible Collateral; Inventory..............................................................29
7.5. The Lender's Payment of Claims Asserted Against the Collateral..............................29
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Page
8. Term of Agreement.......................................................................................29
8.1. Term and Right to Terminate.................................................................29
8.2. Effect of Termination.......................................................................30
9. Miscellaneous...........................................................................................30
9.1. Rights and Remedies Cumulative; Non-Waiver; Etc.............................................30
9.2. Survival of Representations; Reinstatement of Indebtedness..................................30
9.3. Expenses; Indemnification...................................................................30
9.4. Notices.....................................................................................31
9.5. Successors and Assigns......................................................................32
9.6. Counterparts; Construction; Gender..........................................................32
9.7. Powers......................................................................................32
9.8. Approvals...................................................................................32
9.9. Indemnification of the Lender...............................................................32
9.10. Waivers by the Borrower.....................................................................32
9.11. Lawful Charges; Late Charge.................................................................33
9.12. Amendment...................................................................................33
9.13. Severability................................................................................33
9.14. Entire Agreement............................................................................33
9.15. Separate Legal Counsel......................................................................33
9.16. Right of Setoff.............................................................................33
9.17. Arbitration; Preservation and Limitation of Remedies........................................33
9.18. Governing Law; Jurisdiction and Venue; Waiver of Jury Trial.................................34
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LOAN AND SECURITY AGREEMENT
AGREEMENT, dated as of November 2, 1998, between XXXXXXX-ATLANTIC
CORP., a Florida corporation (the "Borrower"), and FIRST UNION NATIONAL BANK, a
national banking association (the "Lender");
W I T N E S S E T H :
In consideration of the mutual covenants herein contained and to induce
the Lender to extend credit to the Borrower, the parties agree as follows:
1. Definitions; Financial and Other Terms.
1.1. Definitions. In addition to the terms defined elsewhere in
this Agreement, the following terms shall have the meanings set forth below:
"Accounts" means all accounts, accounts receivable, contract
rights, notes, bills, acceptances, choses in action, chattel paper, instruments,
documents, and other forms of obligations at any time owing to a Person, and all
"Accounts," as that term is defined in the Code, the proceeds thereof and all of
such Person's rights with respect to any goods represented thereby, whether or
not delivered, goods returned by customers and all rights as an unpaid vendor or
lienor, including rights of stoppage in transit and of recovering possession by
proceedings including replevin and reclamation, together with all customer
lists, books and records, ledger and account cards, computer tapes, disks,
printouts and records, whether now in existence or hereafter created, relating
to Accounts.
"Account Debtor" means any Person who is or who may become
obligated to a Person, under, with respect to, or on account of an Account.
"Adjusted LIBOR" means LIBOR plus two and three-quarters
percent (2.75%) per annum.
"Adjusted LIBOR Market Index Rate" means the LIBOR Market Index
Rate plus two and three-quarters percent (2-3/4%) per annum.
"Advance" means the advance of funds under a Revolving Credit
Loan.
"Advance Date" means the date a Revolving Credit Loan is
Advanced hereunder.
"Advance Request" means a request for an Advance of a Revolving
Credit Loan or an interest rate conversion under Section 3.3, substantially in
the form of Exhibit B or such other form as Lender shall request.
"Affiliate" of a named Person means (a) any Person owning 5% or
more of the voting stock or rights of such named Person or of which the named
Person owns 5% or more of such voting stock or rights; (b) any Person
controlling, controlled by or under common control with such named Person; (c)
any officer or director of such named Person or any Affiliates of the named
Person; and (d) any family member of the named Person or any Affiliate of such
named Person. For the purposes of this definition, "control" means the
possession, directly or indirectly, to direct or cause the direction of
management and policies of such Person, whether through ownership of securities,
by control or otherwise.
"Beneficiary" means the person who is the beneficiary of a
Letter of Credit.
"Borrower Collateral" means all property of the Borrower (other
than real estate), wherever located and whether now owned by Borrower or
hereafter acquired, including, but not limited to all of Borrower's: (a)
Inventory; (b) General Intangibles; (c) Accounts and Chattel Paper and any other
instrument or intangible representing payment for goods or services; (d)
Equipment; (e) funds on deposit with or under the control of the Lender or its
agents or correspondents and all lockboxes which may be established; and (f)
parts, replacements, additions, accessions, substitutions, profits, and products
and cash and non-cash proceeds of any of the foregoing (including insurance
proceeds
payable by reason of loss or damage thereto) in any form and wherever located.
Borrower Collateral shall include all written or electronically recorded records
relating to any such Borrower Collateral and other rights relating thereto.
"Borrowing Base" means the lesser of (i) $2,250,000 or (ii) 60%
of Eligible Accounts plus 50% of Eligible Inventory consisting of spare parts
plus 60% of Eligible Inventory consisting of Equipment.
"Borrowing Base Certificate" means the Borrowing Base
Certificate substantially in the form of Exhibit A or such other form as Lender
may request.
"Business Day" means a weekday on which commercial banks are
open for business in Miami, Florida.
"Chattel Paper" means all writing or writings which evidence
both a monetary obligation and a security interest in or the lease of specific
goods and in addition includes all property included in the definition of
"chattel paper" as used in the Code.
"Closing Date" means the date first above written.
"Code" means the Uniform Commercial Code, as in effect in
Florida and in any other jurisdiction, as applicable, from time to time.
"Collateral" means all Borrower Collateral and all Metro-Tel
Collateral.
"Consolidated Tangible Total Assets" means all assets which
would properly be shown on Borrower's and Metro-Tel's consolidated balance sheet
in accordance with GAAP, less the aggregate amount of such assets which are
classified as intangible assets or General Intangibles in accordance with GAAP.
"Consolidated Tangible Net Worth" means Consolidated Tangible
Total Assets less Consolidated Total Liabilities.
"Consolidated Total Liabilities" means all liabilities which
would properly be shown on Borrower's and Metro-Tel's consolidated balance sheet
in accordance with GAAP, except indebtedness for borrowed money which is
subordinated in a manner satisfactory to Lender in its sole discretion.
"Debt" means all liabilities of a Person as determined under
GAAP and all obligations which such Person has guaranteed or endorsed or for
which such Person is otherwise secondarily or jointly liable, and shall include,
without limitation (a) all obligations for borrowed money or purchased assets,
(b) obligations secured by assets whether or not any personal liability exists,
(c) the capitalized amount of any capital or finance lease obligations, (d) the
unfunded portion of pension or benefit plans or other similar liabilities, (e)
obligations as a general partner, (f) contingent obligations pursuant to
guaranties, endorsements, letters of credit and other secondary liabilities and
(g) obligations for deposits.
"Default" means any event which with the passage of time or the
giving of notice or both would become an Event of Default.
"Default Rate" means a rate equal to the lesser of (a) the
Prime Rate plus five percent per annum or (b) the highest rate of interest
allowed by applicable law.
"Eligible Accounts" shall mean all genuine, bona fide Accounts
(valued net of the maximum amount of any discounts or other reductions) of the
Borrower arising in the ordinary course of Borrower's business from the sale and
delivery of Inventory or the rendition of services as to which the Lender has a
first priority perfected Lien subject only to Permitted Liens, excluding: (a)
Accounts outstanding for 91 days or more from the date of invoice; (b) Accounts
owing from any Affiliate of the Borrower; (c) Accounts owed by a creditor of the
Borrower or which are
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in dispute or subject to any counterclaim, deduction, contra-account or offset;
(d) Accounts owing by any Account Debtor which is not Solvent; (e) Accounts
arising from a sale on a xxxx-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment or similar basis or which is subject to
repurchase, return, rejection, repossession, loss or damage; (f) Accounts owed
by an Account Debtor in the State of Minnesota or the State of New Jersey
(unless Borrower has qualified to do business in such State or filed a current
Notice of Business Activities report in such State); (g) Accounts as to which
the goods giving rise to the Account have not been delivered to and accepted by
the Account Debtor or the service giving rise to the Account has not been
completely performed or which do not represent a final sale; (h) Accounts owed
by the United States of America unless the Borrower shall have complied to the
Lender's satisfaction with the Federal Assignment of Claims Act; (i) the total
Accounts owed by an Account Debtor and its Affiliates exceeds a credit limit
established by the Lender in its discretion (to the extent of such excess); (j)
the Account is evidenced by a note or other instrument, (other than Chattel
Paper) or reduced to judgment; (k) Accounts which, by contract, subrogation,
mechanics' lien laws or otherwise, are subject to claims by the Borrower's
creditors or other third parties or which are owed by Account Debtors as to whom
any creditor of the Borrower (including any bonding company) has lien rights;
(l) other Accounts for which the validity, collectibility or amount of which is
determined in good faith by the Borrower or the Lender to be doubtful; (m) any
Account for which there is any discount, allowance, claim, set-off, counterclaim
or Lien which has not been disclosed in writing to the Lender; (n) any Account
to the extent it is not for a liquidated amount; and (o) any other Account which
the Lender, upon notice to the Borrower, deems ineligible in its sole credit
judgment. No Accounts shall be Eligible Accounts if any representation,
warranties or covenants herein relating thereto shall be inaccurate or violated.
Unless the Borrower notifies the Lender in writing to the contrary, the Borrower
shall be deemed to have made a continuing representation and warranty that each
Eligible Account has not become ineligible.
"Eligible Inventory" shall mean Inventory created or acquired
in the ordinary course of the Borrower's business consisting of finished goods
and raw materials of the Borrower as to which the Lender has a first priority
perfected Lien subject only to Permitted Liens, of a kind usually and
customarily sold by the Borrower and which is not, because of damage, age,
unmerchantability, obsolescence or any other condition or circumstance, impaired
in condition, value or marketability in the credit judgment of the Lender or the
Borrower, and which is not, in the good faith credit judgment of the Lender,
deemed ineligible after notice to the Borrower. No Inventory shall be eligible
if it is consigned or if it fails to meet all applicable governmental standards
for its use and sale. No Inventory shall be eligible unless it is located at the
location of Borrower set forth in Section 9.4 or on Schedule 2.9 or at 000 X.X.
00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 or at 000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx
00000, or at 000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 or at 0000 X.X. 0xx
Xxxxx, Xxxxx, Xxxxxxx 00000, or if it is stored with a warehouseman, bailee or
similar party. Eligible Inventory shall be computed at the lesser of cost or
fair market value. No Inventory shall be Eligible Inventory if any
representation, warranty, or covenant herein relating to such Inventory is
inaccurate or violated. Unless the Borrower notifies the Lender in writing to
the contrary, the Borrower shall be deemed to have made a continuing
representation and warranty that none of the Eligible Inventory has become
ineligible.
"Equipment" means all furniture, fixtures, equipment, motor
vehicles, rolling stock and other tangible property of a Person of every
description, except Inventory, and in addition includes all property included in
the definition of "equipment" as used in the Code.
"Event of Default" means any event specified as such in Section
6.1, provided that there shall have been satisfied any requirement in connection
with such event for the giving of notice or the lapse of time, or both.
"Foreign Exchange Subfacility" has the meaning set forth in
Section 3.10.
"Forward" shall have the meaning set forth in Section 3.10.
"GAAP" shall have the meaning ascribed thereto in Section 1.2.
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"General Intangibles" means all intangible personal property
(including things in action) except Accounts, Chattel Paper and instruments (as
defined in the Code), including all contract rights, copyrights, trademarks,
trade names, service marks, patents, patent drawings, designs, formulas, rights
to a Person's name itself, customer lists, rights to all prepaid expenses,
marketing expenses, rights to receive future contracts, fees, commissions and
orders relating in any respect to any business of a Person, all licenses and
permits, all computer programs and other software owned by a Person, or which a
Person has the right to use, and all rights for breach of warranty or other
claims for funds to which a Person may be entitled, and in addition includes all
property included in the definition of "general intangibles" as used in the
Code. Without limiting the foregoing, General Intangibles includes all rights
under the Merger Agreement.
"Guarantor" shall mean any Person now or hereafter
guaranteeing, endorsing or otherwise becoming liable for any Indebtedness,
including, but not limited to, Metro-Tel.
"Guaranty Agreement" or "Guaranty" shall mean any guaranty
instrument now or hereinafter executed by a Guarantor in favor of Lender.
"Indebtedness" means all obligations now or hereafter owed to
the Lender and/or its Affiliates by the Borrower and/or its Affiliates, whether
fixed, contingent or otherwise, and whether related or unrelated to the Loans,
including, without limitation, amounts owed or to be owed under the terms of the
Loan Documents, or arising out of the transactions described therein, including,
without limitation, the Loans, Letter of Credit Obligations, obligations
relating to the Foreign Exchange Subfacility, sums advanced to pay overdrafts on
any account maintained by the Borrower with the Lender, reimbursement
obligations for outstanding letters of credit issued at the request of the
Borrower, amounts paid by the Lender under letters of credit or drafts accepted
by the Lender for the account of the Borrower, together with all interest
accruing thereon, and all fees, costs or expenses payable by Borrower under any
Loan Document, including, but not limited to, all costs of collection,
reasonable attorneys' fees, and expenses of or advances by the Lender which the
Lender pays or incurs in discharge of obligations of the Borrower or to
repossess, protect, preserve, store or dispose of any Collateral, whether such
amounts are now due or hereafter become due, direct or indirect and whether such
amounts due are from time to time reduced or entirely extinguished and
thereafter re-incurred. The term also includes, but without limitation, the
obligations of the Borrower under any Interest Rate Swap Agreement for any and
all "Loss", "Settlement Amount" and "Unpaid Amounts", as such terms are defined
in such Interest Rate Swap Agreement.
"Interest Rate Swap Agreement" means each and every ISDA Master
Agreement, including all schedules, confirmations and exhibits thereto, entered
into at any time between Lender and the Borrower, as such agreement may be
amended or otherwise modified from time to time hereafter.
"Inventory" means all goods, merchandise and other personal
property of a Person which is held for sale or lease or furnished or to be
furnished under a contract for services or raw materials, and all work in
process and materials used or consumed or to be used or consumed in a Person's
business, and in addition, includes all property included in the definition of
"inventory" as used in the Code.
"Letter of Credit" means a Trade Letter of Credit.
"Letter of Credit Agreement" shall mean the Continuing
Commercial Credit Agreement (and each Application by Applicant for a Credit as
referenced therein) of even date herewith between Lender and the Borrower,
the form of which is attached hereto as B, it being understood that each Letter
of Credit issued thereunder or in connection therewith shall be issued pursuant
to and subject to the terms and conditions of this Agreement.
"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Lender at the request of the Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance by Lender of Letters of Credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount which may be payable by Lender
thereupon or pursuant thereto.
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"LIBOR" is the rate for U.S. Dollar deposits of that many
months maturity as reported on Telerate page 3750 as of 11:00 a.m. London time,
on the second Business Day before such LIBOR Period begins (or, if not so
reported, then as determined by Lender from another recognized source or
interbank quotation).
"LIBOR Loan" means, at any time, any outstanding Loan or
portion thereof that bears interest at Adjusted LIBOR at such time.
"LIBOR Market Index Rate Loan" means, at any time, any
outstanding portion of any Loan that bears interest at the Adjusted LIBOR Market
Index Rate at such time.
"LIBOR Market Index Rate", for any day, is the rate for one
month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m.,
London time, on such day, or if such day is not a Business Day, then the
immediately preceding Business Day (or if not so reported, then as may be
determined by Lender from another recognized source or interbank quotation).
"LIBOR Period" means the period commencing on the date a LIBOR
Loan is made and ending on the numerically corresponding day in the first
calendar month thereafter; provided that if a LIBOR Period would end on a day
which is not a Business Day, such LIBOR Period shall be extended to the next
Business Day unless such Business Day would fall in the next calendar month, in
which event such LIBOR Period shall end on the immediately preceding Business
Day.
"Lien" means 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
under the UCC or comparable law of any jurisdiction).
"Loans" means the Term Loan and the Revolving Credit Loans.
"Loan Documents" means this Agreement, any other Security
Agreement, the Notes, any Guaranty Agreement, all Letter of Credit Agreements
(and all agreements and documents executed in connection therewith), all UCC-1
financing statements required under this Agreement or any of the other Loan
Documents, any Interest Rate Swap Agreement, and all other agreements, documents
and instruments now or hereafter evidencing, describing, guaranteeing, relating
to or securing the Indebtedness.
"Material Adverse Change" means a material adverse change in
any of: (i) the condition (financial or otherwise), business, performance,
profits, cash flows, operations, properties or prospects of the Borrower or
Metro-Tel; (ii) the legality, validity or enforceability of any Loan Document
which substantially deprives the Lender of the benefits thereof; (iii) the
ability of the Borrower or Metro-Tel to repay the Indebtedness or to perform its
obligations under any Loan Document; (iv) the rights and remedies of the Lender
under the Loan Documents which substantially deprives the Lender of the benefits
thereof; or (v) the Collateral or the Lender's Liens in the Collateral or the
priority of such Liens.
"Material Adverse Effect" means an effect that has a reasonable
likelihood of resulting in or causing a Material Adverse Change.
"Metro-Tel" means Metro-Tel Corp., a Delaware corporation.
"Merger" has the meaning set forth in Section 4.1.
"Merger Agreement" has the meaning set forth in Section 4.1.
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"Metro-Tel Collateral" means all property of Metro-Tel (other
than real estate), wherever located and whether now owned by Metro-Tel or
hereafter acquired, including, but not limited to all of Metro-Tel's: (a)
Inventory; (b) General Intangibles; (c) Accounts and Chattel Paper and any other
instrument or intangible representing payment for goods or services; (d)
Equipment; (e) funds on deposit with or under the control of the Lender or its
agents or correspondents and all lockboxes which may be established; and (f)
parts, replacements, additions, accessions, substitutions, profits, and products
and cash and non-cash proceeds of any of the foregoing (including insurance
proceeds payable by reason of loss or damage thereto) in any form and wherever
located. Metro-Tel Collateral shall include all written or electronically
recorded records relating to any such Metro-Tel Collateral and other rights
relating thereto.
"Notes" means the Term Note and the Revolving Credit Note.
"Permitted Debt" means (a) the Indebtedness; (b) Debt payable
to suppliers and other trade creditors in the ordinary course of business on
ordinary and customary trade terms and which is not past due more than 30 days;
(c) Debt secured by Permitted Liens; (d) Debt which is subordinated in right and
time of payment to all Indebtedness in a manner reasonably satisfactory in form
and substance to the Lender; and (e) such other Debt as the Lender may consent
to in writing from time to time.
"Permitted Liens" means (a) Liens securing the Indebtedness;
(b) Liens for taxes and other statutory Liens, landlord's Liens and similar
Liens arising out of operation of law (provided they are subordinate to the
Lender's Liens on Collateral) so long as the obligations secured thereby are not
past due more than 30 days; (c) Liens described on Schedule 1.1 hereto (if any),
provided, however, that no Debt not now secured by such Liens shall become
secured by such Liens hereafter other than Liens arising by operation of law
(provided they are subordinate to the Lender's Liens on Collateral) and such
Liens shall not encumber any other assets; and (d) purchase money Liens to the
extent such Liens secure not more than 100% of the purchase price of assets
purchased without violating the terms hereof and cover only assets purchased.
"Person" means any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, limited or
general partnership, limited liability company, any government, or any agency or
political subdivision of any government.
"Prime Rate" shall be (for any day) that rate of interest
announced by Lender from time to time as its Prime Rate and is one of several
interest rate bases used by Lender. Lender lends at rates both above and below
its Prime Rate, and Borrower acknowledges that Lender's Prime Rate is not
represented or intended to be the lowest or most favorable rate of interest
offered by Lender.
"Prime Rate Loan" means a Loan which bears interest at the
Prime Rate.
"Revolving Credit Loan" shall have the meaning set forth in
Section 3.1(b).
"Revolving Credit Loan Maturity Date" shall mean the earlier of
(i) November 2, 1999 or (ii) the date the Lender demands repayment of the
Revolving Credit Loans.
"Revolving Credit Note" shall mean the revolving credit note
referenced in Section 3.2.
"Security Agreement" means this Agreement as it relates to a
Lien on any or all of the Collateral, and any other mortgage, security agreement
or similar instrument now or hereafter executed by the Borrower or any other
Person granting the Lender a Lien on any Collateral to secure the Indebtedness.
"Solvent" means, as to any Person, that such Person has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature and
6
owns property having a value, both at fair valuation and at present fair
saleable value, greater than the amount required to pay its debts.
"Spot" shall have the meaning set forth in Section 3.10.
"Subsidiary" means any corporation, partnership or other Person
in which the Borrower, directly or indirectly, owns 50% or more of the stock,
capital or income interests, or other beneficial interests.
"Term" shall have the meaning ascribed thereto in Section 8.1.
"Term Loan" shall have the meaning set forth in Section 3.1(a).
"Term Loan Maturity Date" shall mean January 2, 2002.
"Term Note" means the term note referenced in Section 3.2.
"Trade Letter of Credit" shall mean a letter of credit (sight
or time) issued by the Lender for the account of the Borrower payable to a
supplier of Borrower upon presentation of appropriate supporting documentation.
1.2. Financial Terms. All financial terms used herein shall
have the meanings assigned to them under generally accepted accounting
principles consistently applied and maintained on a basis for the Borrower
throughout the period indicated and consistent with the prior financial practice
of the Borrower on a consolidated basis ("GAAP"), unless another meaning shall
be specified.
1.3. Other Terms. All other terms contained in this Agreement
shall, when the context so indicates, have the meanings provided for by the Code
to the extent the same are used or defined therein. Any reference to this
Agreement or any other Loan Document shall include any amendment, supplement,
enlargement, extension, renewal, restatement or other modification thereof.
2. Representations and Warranties. In order to induce the Lender to
enter into this Agreement and to make the Loans, to issue the Letters of Credit
and to extend credit accommodations under the Foreign Exchange Subfacility, the
Borrower makes the following representations and warranties, all of which shall
survive the execution and delivery of the Loan Documents and the making of the
Loans and the issuance of Letters of Credit hereunder, and shall be deemed to be
made on each day on which any Loan is outstanding (except to the extent a
representation and warranty is made as of a particular date, in which case they
shall be true and correct as of such date).
2.1. Valid Existence and Power. Each of Borrower and Metro-Tel
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and is duly qualified or licensed
to transact business in all places where the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect. Each of Borrower and
Metro-Tel has the power to make and perform the Loan Documents executed by it
and all such instruments will constitute the legal, valid and binding
obligations of such Person, enforceable in accordance with their respective
terms, except to the extent enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, moratorium or other laws relating to
creditors' rights generally and general principles of equity.
2.2. Authority. The execution, delivery and performance of the
Loan Documents by each of Borrower and Metro-Tel have been duly authorized by
all necessary action of such Person, and do not and will not violate any
provision of law or regulation, or any writ, order or decree of any court or
governmental or regulatory authority or agency or any provision of the governing
instruments of such Person, and do not and will not, with the passage of time or
the giving of notice, result in a breach of, or constitute a default or require
any consent under, or result in the creation of any Lien, other than Permitted
Liens, upon any property or assets of such Person pursuant to, any law,
regulation, instrument
7
or agreement to which such Person is a party or by which such Person or its
respective properties may be subject, bound or affected.
2.3. Condition. Other than as disclosed in the financial
statements most recently delivered to the Lender, neither Borrower nor Metro-Tel
has any direct or contingent obligations or liabilities required to be disclosed
therein under GAAP (including any guarantees or leases) or any material
unrealized or anticipated losses from any commitments required to be disclosed
therein under GAAP, except for executory contracts. To the Borrower's knowledge,
there is no fact which the Borrower has not disclosed to the Lender in writing
which could reasonably be expected to have a Material Adverse Effect.
2.4. Financial Statements. The financial statements of Borrower
and Metro-Tel delivered to Lender have been prepared in accordance with GAAP,
contain no material misstatements or omissions, and fairly present in all
material respects the financial position, assets and liabilities of such Person
as of the respective dates thereof and the results of operations and cash flows
of such Person for the respective periods then ended.
2.5. Litigation; Government Regulation. There are no actions,
suits or proceedings pending or threatened against or affecting the Borrower or
Metro-Tel at law or in equity before any court or administrative officer or
agency which, if adversely determined as to Borrower or Metro-Tel, could
reasonably be expected to have a Material Adverse Effect. Neither Borrower nor
Metro-Tel is in violation of or in default under any applicable statute, rule,
order, decree, writ, injunction or regulation of any governmental body
(including any court), the violation of which could reasonably be expected to
have a Material Adverse Effect.
2.6. Agreements, Etc. Neither Borrower nor Metro-Tel is a party
to any agreement or instrument or subject to any court order, governmental
decree or any charter or other corporate restriction which could reasonably be
expected to have a Material Adverse Effect. Neither Borrower nor Metro-Tel is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party, or any law, regulation, decree, order or the like which could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred.
2.7. Authorizations. All authorizations, consents, approvals
and licenses required under applicable law or regulation for the ownership or
operation of the property owned or operated by the Borrower or Metro-Tel or for
the conduct of any business in which the Borrower or Metro-Tel is engaged have
been duly issued and are in full force and effect, and neither the Borrower nor
Metro-Tel is in default, nor has any event occurred which, with the passage of
time or the giving of notice, or both, would constitute a default, under any of
the terms or provisions of any part thereof, or under any order, decree, ruling,
regulation or other decision or instrument of any governmental commission,
bureau or other administrative agency or public regulatory body having
jurisdiction over the Borrower or Metro-Tel, which default is reasonably likely
to have a Material Adverse Effect. Except as noted herein, no approval, consent
or authorization of, or filing or registration with, any governmental
commission, bureau or other regulatory authority or agency is required with
respect to the execution, delivery or performance of any Loan Document by the
Borrower or Metro-Tel.
2.8. Title; Collateral. The Borrower and/or Metro-Tel has good
title to the Collateral and to all of the assets set forth in the financial
statements most recently delivered to the Lender (except Inventory sold since
the date of such financial statements in the ordinary course of business), free
and clear of all Liens, except Permitted Liens. The Borrower and Metro-Tel alone
have full ownership rights in all Collateral, subject only to Permitted Liens.
The Liens granted to the Lender herein and pursuant to any other Security
Agreement (a) constitute and, as to subsequently acquired property, will
constitute, Liens under applicable law including, without limitation, the Code,
entitled to all of the rights, benefits and priorities provided by applicable
law including, without limitation, the Code and (b) are, and as to such
subsequently acquired property will be, first priority, fully perfected,
superior and prior to the rights of all third persons, now existing or hereafter
arising, subject only to Permitted Liens. All of the Collateral is intended for
use solely in the Borrower's and Metro-Tel's business. Except as set forth on
Schedule 2.8, no Affiliate of Borrower or Metro-Tel has any interest in any
assets used in Borrower's or Metro-Tel's business.
8
2.9. Location and Names. The chief executive office and
principal place of business of the Borrower and of Metro-Tel, where their
respective business records are located, is the address designated for notices
in Section 9.4 and at 000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, respectively. Neither Borrower nor Metro-Tel has any other places of
business, except as shown on Schedule 2.9. Neither the Borrower, nor Metro- Tel
has, during the past five years, been known as or used any other corporate,
fictitious or trade names or been the subject of any bankruptcy or similar
proceeding.
2.10. Taxes. Neither the Borrower nor Metro-Tel is delinquent
in the payment of any taxes which have been levied or assessed by any
governmental authority against it or its assets. The Borrower and Metro-Tel have
timely filed all tax returns which are required by law to be filed, and have
paid all taxes and all other assessments or fees levied upon the Borrower or
Metro-Tel or upon their respective properties to the extent that such taxes,
assessments or fees have become due. No controversy in respect of taxes is
pending or, to the knowledge of the Borrower, threatened against the Borrower or
Metro-Tel. The Borrower and Metro-Tel have paid all withholding, FICA and other
payments required by federal, state or local governments with respect to any
wages paid to employees.
2.11. Labor Law Matters. None of Borrower's or Metro-Tel's
employees is a member of a labor union, and neither the Borrower nor Metro-Tel
is a party to or otherwise bound by, or threatened with any labor or collective
bargaining agreement. None of the Borrower's or Metro-Tel's employees is known
to be engaged in organizing any labor union or other employee group that is
seeking recognition as a bargaining unit. No goods or services have been or will
be produced by the Borrower or Metro-Tel in violation of any applicable labor
laws or regulations or in violation of any minimum wage, wage-and-hour or other
similar laws or regulations. Neither the Borrower nor Metro-Tel is subject to
any material labor dispute.
2.12. Accounts. Each Account, instrument, Chattel Paper and
other writing constituting any portion of the Collateral is (a) genuine and
enforceable in accordance with its terms except for such limits thereon arising
from bankruptcy and similar laws relating to creditors' rights; (b) not subject
to any defense, setoff, claim or counterclaim of any nature against the Borrower
or Metro-Tel except (i) for claims not exceeding $50,000 in the aggregate
incurred in the ordinary course of business or (ii) as to which the Borrower has
notified the Lender in writing; and (c) not subject to any other circumstances
that would impair the validity, enforceability or amount of such Collateral
except as to which the Borrower has notified the Lender in writing. Each Account
and all Inventory included in any Advance Request or Borrowing Base Certificate
or calculation delivered to Lender as an Eligible Account or Eligible Inventory
meets and will meet all requirements of an Eligible Account or Eligible
Inventory, as the case may be.
2.13. Use and Location of Collateral. The Collateral is located
only, and shall at all times be kept and maintained only, at the Borrower's or
Metro-Tel's location or locations as described on Schedule 2.9, which are (i)
owned and operated by the Borrower or Metro-Tel (and for each of which a
mortgagee's waiver has been delivered
in accordance with Section 4.1(f)), or (ii) leased and operated by the Borrower
or Metro-Tel (and for each of which a landlord's lien waiver has been delivered
in accordance with Section 4.1(f)).
2.14. Judgment Liens. Neither the Borrower nor Metro-Tel nor
any of their assets is subject to any unpaid judgments (whether or not stayed)
or any judgment liens in any jurisdiction.
2.15. Intent and Effect of Transactions; Borrower's Solvency.
This Agreement and the transactions contemplated herein are not made or incurred
with intent to hinder, delay or defraud any Person to whom the Borrower or
Metro-Tel has been, is now, or may hereafter become indebted. The Borrower and
Metro-Tel are Solvent. After giving effect to this Agreement, and the
transactions contemplated hereby (including the uses of proceeds permitted by
this Agreement), the Borrower and Metro-Tel will be Solvent and will not be left
with an unreasonably small capital with which to engage in their businesses or
in any businesses or transactions in which Borrower or Metro-Tel intend to
engage. This Agreement is not entered into with the intent to incur, or with the
belief that the Borrower or Metro-Tel would incur, debts that would be beyond
Borrower's or Metro-Tel's ability to pay as such debts mature.
9
2.16. Subsidiaries. Borrower has no Subsidiaries. Other than
Borrower, Metro-Tel has no Subsidiaries.
2.17. Hazardous Materials. Except as disclosed on Schedule
2.17, the Borrower's and Metro-Tel's properties and improvements thereon have
not in the past been used, are not presently being used, and will not in the
future be used for, nor does the Borrower or Metro-Tel engage in, the handling,
storage, manufacture, disposition, processing, transportation, use or disposal
of hazardous or toxic materials, in any such instance in violation of applicable
environmental laws.
2.18. ERISA. Either the Borrower and Metro-Tel have no pension,
profit-sharing or other benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or they have furnished to the Lender
true and complete copies of the latest annual report required to be filed
pursuant to Section 104 of ERISA, with respect to each employee benefit plan or
other plan maintained for employees of the Borrower or Metro- Tel and covered by
Title IV of ERISA (a "Plan"), and no Termination Event (as hereinafter defined)
with respect to any Plan has occurred and is continuing and no fact exists which
might constitute grounds for a Termination Event or for the appointment of a
trustee to administer any such plan. For the purposes of this Agreement, a
"Termination Event" means a "reportable event" as defined in Section 4043(b) of
ERISA ("Reportable Event"), or the filing of a notice of intent to terminate
under Section 4041 of ERISA. Neither the Borrower nor Metro-Tel has any unfunded
liability with respect to any such Plan. No "prohibited transaction" (as defined
under ERISA) has occurred with respect to any such Plan. Each such Plan has been
administered in accordance with ERISA and the Code.
2.19. Investment Company Act. Neither the Borrower nor
Metro-Tel is an "investment company" as defined in the Investment Company Act of
1940, as amended.
2.20. Use of Proceeds. The Loans shall be used solely to repay
outstanding indebtedness to Lender and to finance working capital.
2.21. Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship of the Borrower or Metro-Tel with any customer or any
group of customers whose purchases individually or in the aggregate are material
to the business of the Borrower or Metro-Tel, or with any material supplier.
2.22. Maintenance of Business and Properties. Each of Borrower
and Metro-Tel shall at all times maintain, preserve and protect its property
used or useful in the conduct of its business, and keep the same in good repair,
working order and condition, and from time to time make, or cause to be made,
all material needful and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be conducted properly and in accordance with standards generally accepted in
businesses of a similar type and size at all times, and maintain and keep in
full force and effect all licenses and permits necessary to the proper conduct
of its business.
2.23. Full Disclosure. The Loan Documents, together with the
statements furnished by or on behalf of the Borrower or Metro-Tel to the Lender
in connection with the Loan Documents do not, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading. To the Borrower's knowledge, there is no fact
which the Borrower has not disclosed to the Lender in writing which might
reasonably be expected to have a Material Adverse Effect.
3. Loans.
3.1. Advances of Loans.
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(a) Advance of Term Loan. Upon the terms and subject
to the conditions of this Agreement and the other Loan Documents, and provided
there has not occurred a Default or Event of Default, the Lender agrees to make
a term loan (the "Term Loan") to the Borrower on the Closing Date, in the
principal amount of $2,400,000. The Lender will disburse the proceeds of the
Term Loan to the Borrower in accordance with written instructions furnished to
the Lender by the Borrower on or before the Closing Date.
(b) Advance of Revolving Credit Loans. Upon the terms
and subject to the conditions of this Agreement and the other Loan Documents,
and provided there has not occurred a Default or Event of Default and Lender has
not demanded repayment of the Revolving Credit Loans (as defined herein) (and
provided a Default or Event of Default would not occur as a result of the making
of a Revolving Credit Loan), from time to time upon the request of the Borrower
until the Revolving Credit Loan Maturity Date, upon Lender's receipt from
Borrower of an Advance Request, the Lender may in its discretion make revolving
credit loans ("Revolving Credit Loans") to Borrower, up to a total principal
amount not at any time to exceed the Borrowing Base less all Letter of Credit
Obligations less the total value of outstanding Forward and Spot transactions.
Upon the terms and subject to the conditions of this Agreement and the other
Loan Documents, and provided that there has not occurred a Default or Event of
Default and Lender has not demanded repayment of the Revolving Credit Loans, the
outstanding principal balance of the Revolving Credit Loans may increase and
decrease from time to time, and Advances thereunder may be repaid and
reborrowed, so long as the total principal balance of all outstanding Revolving
Credit Loans does not at any time exceed the Borrowing Base less all Letter of
Credit Obligations less the total value of outstanding Forward and Spot
transactions. Should there occur any overdraft of any deposit account maintained
by the Borrower with the Lender, the Lender may, at its option, disburse funds
(whether or not in excess of the Borrowing Base) to eliminate such overdraft and
such disbursement shall be deemed an advance of Revolving Credit Loan proceeds
hereunder entitled to all of the benefits of the Loan Documents. Nothing herein
shall be deemed an authorization of or consent to the creation of an overdraft
in any account or create any obligations on the part of the Lender. The Borrower
shall immediately repay to the Lender any amount by which the principal amount
of Revolving Credit Loans outstanding exceeds the Borrowing Base less all Letter
of Credit Obligations less the total value of outstanding Forward and Spot
transactions. All Advances, whether or not in excess of the Borrowing Base shall
be part of the Revolving Credit Loans and Indebtedness, shall bear interest as
provided herein, shall be payable in accordance herewith and shall be entitled
to all rights and security provided for herein and in the other Loan Documents.
In determining the Borrowing Base, the Lender shall have the right from time to
time upon notice to the Borrower to establish and re-establish such reserves as
it deems appropriate in its sole credit judgment.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, BORROWER SHALL REPAY ALL REVOLVING CREDIT
LOANS IN FULL IMMEDIATELY UPON DEMAND OF LENDER, REGARDLESS OF WHETHER ANY
DEFAULT OR EVENT OF DEFAULT HAS OCCURRED OR IS CONTINUING.
3.2 The Notes. The obligation of the Borrower to repay (i) the
Term Loan shall be evidenced by the term note in the form of Exhibit C hereto
(the "Term Note") and, (ii) the Revolving Credit Loan shall be evidenced by the
revolving credit note in the form of Exhibit D hereto (the "Revolving Credit
Note"); in each instance duly executed by the Borrower, dated the Closing Date
and payable to the order of the Lender.
3.3 Notice and Manner of Borrowing. Upon the terms and subject
to the conditions hereof, Borrower shall give Lender irrevocable written notice
("Advance Request") of each proposed Advance or rate conversion not later than
11:00 a.m., Miami time, (i) on the same Business Day as such proposed borrowing
or rate conversion to a Prime Rate Loan or a LIBOR Market Index Rate Loan and
(ii) at least two Business Days before each proposed Advance or rate conversion
to a LIBOR Loan. Each such notice shall include or be accompanied by a Borrowing
Base Certificate and specify (i) the date of such Advance or rate conversion,
which shall be a Business Day, (ii) the amount to be Advanced or converted,
(iii) the type of Loan (i.e., Prime Rate Loan, LIBOR Loan or LIBOR Market Index
Rate Loan) selected, (iv) for LIBOR Loans, that the LIBOR Period shall be for a
period of one month, and (v) containing such other information as Lender shall
reasonably request. Advance Requests received after 11:00 a.m. shall be deemed
received on the next Business Day. Once delivered, any Advance Request shall be
irrevocable. All obligations hereunder and under the other
11
Loan Documents shall constitute one general obligation of the Borrower. All
outstanding Revolving Credit Loans shall either be Prime Rate Loans or LIBOR
Market Index Rate Loans (but not both at any time) and the Term Loan shall
either be a Prime Rate Loan or a LIBOR Loan (but not both at any time), all as
elected by Borrower as provided herein. When the Prime Rate is selected, it
shall be adjusted daily as applicable to reflect the Prime Rate and the Prime
Rate shall continue to apply until another interest rate option is selected
pursuant to the terms hereof. When the Adjusted LIBOR Market Index Rate is
selected, it shall be adjusted daily as applicable to reflect the LIBOR Market
Index Rate and the Adjusted LIBOR Market Index Rate shall continue to apply
until another interest rate option is selected pursuant to the terms hereof.
When the Adjusted LIBOR Rate is selected, such rate shall be fixed for the LIBOR
Period and shall apply for successive LIBOR Periods at the then prevailing
successive rate until another interest rate option is selected pursuant to the
terms hereof. A LIBOR Loan may only be repaid, converted or renewed at the end
of the LIBOR Period. All Loans shall initially be Prime Rate Loans unless
otherwise requested by Borrower.
3.4. Interest.
(a) Generally. All interest accrued on any Loan shall
be due and payable on each date when all or any amount of the unpaid principal
balance of such Loan shall be due (whether by maturity, optional or mandatory
prepayment, acceleration or otherwise). Interest on all Loans shall also be due
and payable in arrears on the earlier of the first Business Day of each month or
the end of the applicable LIBOR Period, if any. Except as otherwise expressly
provided herein, interest on Revolving Credit Loans shall be payable at a rate
per annum equal to the Prime Rate or the Adjusted LIBOR Market Index Rate, as
selected by Borrower in the manner set forth herein. Except as otherwise
expressly provided herein, interest on the Term Loan shall be payable at a rate
per annum equal to the Prime Rate of Adjusted LIBOR, as selected by Borrower in
the manner set forth herein.
(b) Restrictions on LIBOR Loans. Notwithstanding any
provision to the contrary set forth herein, the right of Borrower to elect to
have LIBOR Loans outstanding shall be subject to the following restrictions:
(i) no advance, renewal or continuation of a
LIBOR Loan upon the expiration of a LIBOR Period shall be permitted
during the continuation of a Default or an Event of Default and upon
the occurrence and during the continuance of any Default or Event of
Default, all LIBOR Loans then outstanding shall immediately and
automatically bear interest at the Default Rate;
(ii) anything herein to the contrary
notwithstanding, if Lender determines that quotations of interest rates
for deposits are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for LIBOR Loans or LIBOR Market Index Rate Loans under this Agreement,
or that the rate of interest referred to in the definition of LIBOR
Rate or LIBOR Market Index Rate does not accurately cover the cost to
Lender incurred in making or maintaining such LIBOR Loans or LIBOR
Market Index Rate Loans, then Lender shall give Borrower prompt notice
thereof, and so long as such condition remains in effect, Lender shall
be under no obligation to make further LIBOR Loans or LIBOR Market
Index Rate Loans and all Loans shall thereafter bear interest at the
Prime Rate (or if an Interest Rate Swap Agreement has been executed, at
the floating rate payable by Lender thereunder with respect to the
amount covered thereby);
(iii) if, at any time, a new or a revision
of any existing law or interpretation or administration (including
reversals) thereof by any applicable governmental authority, central
bank or comparable agency imposes, increases or modifies any reserve or
similar requirement against assets, deposits or other charges (except
taxes on Lender's net income), and any of the foregoing increases the
cost to Lender of maintaining any LIBOR Loan or reduces the amount of
any sum received or receivable by Lender in connection with any LIBOR
Loan, then upon notice to Borrower, the Term Loan shall bear interest
at the Adjusted LIBOR Market Index Rate; and
12
(iv) no LIBOR Loan shall have a LIBOR Period
extending beyond the term Loan Maturity Date.
(c) Additional Payments for LIBOR Loans. Borrower
shall pay to Lender such amount as Lender determines shall be sufficient to
compensate Lender for any loss, cost or expense incurred as a result of any
payment of a LIBOR Loan on a date other than the last day of the LIBOR Period
for such LIBOR Loan. Any such payment shall include, without limitation, an
amount equal to (X) any loss sustained by Lender as a result of reinvesting or
redeploying any amount prepaid at a rate lower than Lender's cost of match
funding such amount, calculated for the period consisting of the remainder of
the relevant LIBOR Period or (Y) any direct breakage or unwinding costs
resulting from the liquidation of deposits that match funded any amount not
borrowed for the duration of the relevant LIBOR Period. Lender's determination
of any such amounts, as specified in Lender's notice to Borrower, shall be
conclusive.
3.5 Repayment of Loans. The principal amount of the Loans shall
be repaid as follows:
(a) Term Loan. Borrower shall repay the principal
amount of the Term Loan in consecutive monthly installments of $40,000 on the
first day of each month, commencing on January 1, 1999. Notwithstanding anything
to the contrary set forth herein, the entire remaining unpaid principal balance
of Term Loan shall be repaid on the earlier of the Term Loan Maturity Date or
the date upon which Borrower's obligations hereunder have been accelerated upon
the occurrence of an Event of Default.
(b) Revolving Credit Loans. Borrower shall repay the
entire principal amount of all Revolving Credit Loans immediately upon the
earliest of (i) the Revolving Credit Loan Maturity Date, (ii) the acceleration
of Borrower's obligations hereunder upon the occurrence of an Event of Default,
(iii) at such time and to the extent that the amount of Revolving Credit Loans
outstanding exceeds the amount permitted hereby or (iv) upon demand by Lender.
3.6. Costs, Fees and Expenses. Costs, fees and expenses which
are payable pursuant to this Agreement or any other Loan Document shall be
payable by Borrower to Lender or Lender's designee upon written demand by Lender
to Borrower. Borrower irrevocably authorizes and directs Lender, at Lender's
option, to cause all sums payable hereunder or under any Loan Document to be
paid on the date due by charging such payment as a Revolving Credit Loan.
Without limiting the generality of the foregoing, all such amounts which are not
paid when due hereunder shall be Indebtedness secured by the Collateral and
shall bear interest at the Default Rate.
3.7. Prepayments. Subject to the terms and conditions of any
Interest Rate Swap Agreement, Borrower may prepay any Loan other than a LIBOR
Loan in whole at any time or in part from time to time on any Business Day by
notifying Lender by 9:00 a.m., Miami, Florida time, on such Business Day,
without penalty or premium; provided, however, that
(i) each such prepayment shall be accompanied by the
payment of accrued interest to the date of such prepayment on the
amount prepaid and shall designate whether it is a payment of a Term
Loan or a Revolving Credit Loan, and
(ii) each partial prepayment of any Term Loan shall
be applied to the remaining scheduled payments of principal prepaid in
the inverse order of their maturities.
Notwithstanding anything to the contrary set forth herein or in
any Loan Document, any prepayment will not affect Borrower's obligation to
continue making payments in connection with any Interest Rate Swap Agreement,
which will remain in full force and effect, notwithstanding such prepayment.
13
3.8 Payments and Computations.
(a) The Borrower shall make each payment hereunder
and under the Notes not later than 12:00 noon, Miami, Florida time, on the day
when due in lawful money of the United States of America to the Lender at its
office at Commercial Loan Payment Center, X.X. Xxx 000000, Xxxxxxx, Xxxxxxx
00000-0000 or such other address as Lender shall designate from time to time.
(b) The Borrower hereby authorizes the Lender, if and
to the extent payment is not made when due hereunder or under any Note, to
charge from time to time against the Borrower's accounts, if any, with the
Lender any amount so due.
(c) All computations of interest shall be made by the
Lender on the basis of a year of three hundred sixty (360) days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest is payable.
(d) Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest.
3.9. Facility for Letters of Credit.
(a) Subject to all of the terms and conditions of
this Agreement and the other Loan Documents, and provided there does not then
exist a Default or Event of Default and provided that no Default or Event of
Default would result from the issuance of a Letter of Credit, the Lender will
issue, upon the Borrower's written request therefor, from time to time on and
after the Closing Date until the Revolving Credit Loan Maturity Date or demand
by Lender of repayment of the Revolving Credit Loans, Trade Letters of Credit
for the account of the Borrower, upon the execution of such documents and
agreements as Lender shall require. In no event shall Letter of Credit
Obligations outstanding at any time hereunder exceed $1,000,000 in the
aggregate. Subject to the terms and conditions set forth in this Agreement and
the other Loan Documents, Lender shall be under no obligation to issue any
Letter of Credit on the Borrower's behalf if, after giving effect to the
requested issuance, the sum of outstanding Revolving Credit Loans plus all
Letter of Credit Obligations plus the total value of outstanding Forward and
Spot transactions would exceed the Borrowing Base.
(b) Notwithstanding anything to the contrary set
forth in this Section 3.9, Lender shall be under no obligation to issue any
Letter of Credit having a maturity date or expiry date which is later than the
Revolving Credit Loan Maturity Date or which is payable in a currency other than
United States Dollars, Italian Lira or Euro-currency (at such time Lender issues
letters of credit generally in Euro-currency).
(c) In the event that Lender shall make any payment
on, or pursuant to, any Letter of Credit, the Borrower shall be obligated to,
following notice of such payment by Lender, immediately reimburse Lender for any
such payment. If the Borrower does not reimburse Lender on the same day that
Lender provides such notice, the Lender shall have the right (but not the
obligation) to make a Revolving Credit Loan in an amount equal to such
unreimbursed portion of such payment; and if Lender elects not to make such
advance of a Revolving Credit Loan, the entire unreimbursed amount and fees and
costs shall continue to be Indebtedness secured by the Collateral and shall
accrue interest at the Default Rate.
(d) In the event that any Letter of Credit
Obligations, whether or not then due and payable, shall for any reason be
outstanding on the date Lender demands repayment of the Revolving Credit Loans
or the Revolving Credit Loan Maturity Date, the Borrower will either (i) provide
the Lender with a letter of credit or other guaranty of payment for all then
outstanding Letters of Credit issued by Lender, satisfactory to the Lender in
its discretion, or (ii) pay to the Lender for the account of Lender cash in an
amount equal to the maximum amount then available to be drawn under
14
such Letters of Credit and fees and costs. All funds delivered to the Lender
pursuant to this subsection (d) shall be held by Lender for the account of the
Borrower.
(e) The Borrower shall comply with all of the terms
and conditions imposed upon the Borrower under each Letter of Credit Agreement
executed by Borrower.
(f) In the event of the Borrower's failure to pay to
the Lender, upon demand, the total amount of liabilities incurred or sums paid
by the Lender in connection with any such Letter of Credit, the Lender shall, in
addition to its rights under the UCC of the State of Florida and under this
Agreement, be fully subrogated to the rights of any Beneficiary of the Letters
of Credit with respect to any obligation of the Borrower to such Beneficiary
discharged with the proceeds of any Letter of Credit.
(g) The Borrower hereby unconditionally agrees to
reimburse the Lender for the total amount of the sums paid by Lender in
connection with the issuance of any Letters of Credit or any additional or
further liability which may accrue against Lender in connection with the same.
(h) The Borrower hereby unconditionally agrees to
indemnify the Lender and hold the Lender harmless from any and all losses,
claims or liabilities arising from any transactions or occurrences relating to
Letters of Credit issued for the Borrower's account, and all obligations
incurred in connection therewith, including any loss or claim due to any action
taken or omitted by any Beneficiary thereof. The Borrower's unconditional
obligation to the Lender shall not be modified or diminished for any reason or
in any amount whatsoever. The Borrower agrees that any action taken by the
Lender in connection with a Letter of Credit, if taken in good faith, shall be
binding upon the Borrower and shall not impose any resulting liability on the
Lender.
(i) In the event that this Agreement is terminated
for any reason by the Borrower or the Lender as herein provided, the Lender
demands repayment of the Revolving Credit Loans or there are any Letter of
Credit Obligations outstanding on the Business Day prior to the Revolving Credit
Loan Maturity Date, the Lender shall be entitled to charge immediately the
Borrower's Revolving Credit Loan account hereunder or any of its other accounts
with the full amount of any outstanding Letter of Credit Obligations, whether
the Borrower's obligations with respect thereto are absolute or contingent at
any time. All funds related to such charge shall be held by Lender to be applied
against Indebtedness. The Lender shall also be entitled to hold an amount which
the Lender may deem reasonably necessary to cover possible claims under any
outstanding Letters of Credit unless and until the Lender is supplied with an
indemnity reasonably satisfactory to it with respect to any possible liability
under such Letters of Credit or a release of its liabilities thereunder.
(j) As additional consideration for Lender's issuing
Letters of Credit for the account of Borrower, Borrower agrees to such fees and
costs in connection therewith as Lender specifies.
(k) All Trade Letters of Credit shall be used only
for the purpose of supporting Borrower's obligations with respect to the
purchase of Inventory or for any other purpose approved in writing by Lender.
3.10. Facility for Foreign Exchange.
(a) Subject to all of the terms and conditions set
forth in this Agreement and the other Loan Documents and provided that there
does not then exist a Default or Event of Default and provided that no Default
or Event of Default would result from the Lender's purchase of foreign exchange
for Borrower, the Lender shall, upon Borrower's written request, purchase
foreign exchange (the "Foreign Exchange Subfacility") for the Borrower's use
from time to time on and after the Closing Date and until the Revolving Credit
Loan Maturity Date, upon Borrower's execution of such documents and agreements
as Lender may request.
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(b) The Borrower may request that the Lender engage
in spot foreign exchange ("Spot") for a value in U.S. Dollars for the purpose of
hedging currency exposure in connection with the Borrower's import activities.
In addition, the Borrower may request that the Lender enter into forward foreign
exchange contracts ("Forward") to hedge currency exposure in connection with the
Borrower's import activities. The amount of Spot and Forward contracts shall not
exceed on any given day or in the aggregate at any time the amount agreed to in
writing by Borrower and Lender. Subject to the terms and conditions set forth in
this Agreement and the other Loan Documents, Lender shall be under no obligation
to enter into any Spot or Forward transactions on Borrower's behalf if, after
giving effect to the requested transaction, the sum of outstanding Revolving
Credit Loans plus all Letter of Credit Obligations plus the total value of
outstanding Forward and Spot transactions would exceed the Borrowing Base.
(c) Obligations under Spot transactions shall be due
and payable by Borrower in U.S. Dollar or foreign currency equivalent, whichever
the case may be, within two Business Days from the date Borrower buys the Spot
foreign exchange (the "Spot Value Date"). Obligations under Forward transactions
shall be due and payable by the Borrower in U.S. Dollar or foreign currency
equivalent, whichever the case may be, on or prior to the maturity date of the
respective contract (the "Forward Value Date"). The Spot Value Date and the
Forward Value Date shall be collectively referred to hereinafter as the "Value
Date".
(d) The Borrower hereby gives the Lender the
authority to make Revolving Credit Loans for all amounts due under the Spot or
Forward transaction on the Value Date.
(e) In the event that any Spot or Forward is
outstanding on the Revolving Credit Loan Maturity Date, the Borrower will
provide or pay to the Lender for any settlement of outstanding Spot or Forwards
either of the following: (i) a standby letter of credit acceptable to the Lender
or other guaranty of payment acceptable to the Lender; or (ii) cash funds to be
directed into an escrow account. The amount required of the Borrower in (i) and
(ii) shall be determined by Lender. Such determination shall be the maximum
amount sufficient for any settlement of outstanding Spot or Forwards engaged in
or entered into with the Borrower.
(f) The Borrower agrees that Lender's internal books
and records, and any other documents required by Lender to evidence such
indebtedness shall be conclusive evidence (absent manifest error) with respect
to all repayments and repayment dates and of the Borrower's indebtedness to
Lender under the Foreign Exchange Subfacility.
(g) The Borrower hereby unconditionally agrees to
indemnify the Lender and hold the Lender harmless from any and all losses,
claims or liabilities arising from any transactions or occurrences relating to
the Foreign Exchange Subfacility, including any loss or claim due to any action
taken or omitted by any third party which is not an Affiliate of the Lender. The
Borrower's unconditional obligation to the Lender shall not be modified or
diminished for any reason or in any amount whatsoever. The Borrower agrees that
any action taken by the Lender in connection with the Foreign Exchange
Subfacility, if taken in good faith, shall be binding upon the Borrower and
shall not impose any resulting liability on the Lender. The Borrower
specifically acknowledges and agrees that all transactions hereunder shall be
undertaken solely on the order of, and at and for the risk of the Borrower. The
Borrower further acknowledges and understands that Lender may engage in similar
transactions for its own account or provide similar facilities for its own
customers. The Borrower recognizes and acknowledges that Lender may, to the
extent permitted by law, engage in transactions and take action for its own
account or in the performance of its duties to other customers, which
transactions or action may differ from the transactions engaged in, or the
action taken (including, without limitation, the timing and nature of such
transaction or action) with respect to the Borrower's account. Nothing in this
Agreement shall be deemed to impose upon Lender any obligation to cause to be
engaged in, for the Borrower's account or the account of any other customer, any
transaction which Lender may engage in for its own account or recommend for the
account of any other customer.
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4. Conditions Precedent to Borrowing.
4.1. Advance. In addition to any other requirement or condition
precedent set forth herein, Lender shall not be required to make the initial
advance on any Loan or issue the initial Letter of Credit, unless and until, in
the sole discretion of Lender, each of the following conditions shall have been
satisfied:
(a) Loan Documents. The Borrower and each other party
to any Loan Documents, as applicable, shall have executed and delivered this
Agreement, any Interest Rate Swap Agreement, the Letter of Credit Agreement, the
Term Note, the Revolving Credit Note, the Guaranty, any subordination
agreements, all Forms UCC- 1, the Notes and other required Loan Documents, all
in form and substance satisfactory to the Lender.
(b) Opinion of Counsel. The Lender shall have
received the opinion of counsel for each of the Borrower and Metro-Tel, as to
the transactions contemplated by this Agreement and the Merger Agreement, in
form and substance satisfactory to the Lender.
(c) Supporting Documents. The Borrower shall cause to
be delivered to the Lender the following documents:
(i) A copy of the Articles or Certificate of
Incorporation of Metro-Tel and the Borrower and a good standing
certificate of the Borrower and Metro-Tel, certified by the
appropriate official of such corporation's state of
incorporation and each state in which such corporation is
qualified to do business;
(ii) Bylaws of the Borrower and Metro-Tel,
certified by an officer thereof;
(iii) Incumbency certificate and certified
resolutions of the board of directors of the Borrower and
Metro-Tel authorizing the execution, delivery and performance
of the Loan Documents;
(iv) UCC-11 searches and other Lien searches
showing no existing Liens on the Collateral other than the
Liens of the Lender and Permitted Liens, or except as approved
by the Lender in its sole and absolute discretion;
(v) a letter to Borrower's and Metro-Tel's
independent accountants, in form and substance satisfactory to
the Lender, authorizing such
accountants to disclose information with respect to the
Borrower and Metro-Tel to the Lender; and
(vi) a copy of the executed Merger Agreement
and all documents and agreements executed in connection
therewith, all certified as true and complete copies by an
officer of Borrower.
(d) Insurance. The Borrower shall have delivered to
the Lender satisfactory evidence of insurance meeting the requirements of
Section 5.3.
(e) Perfection of Liens. UCC-1 financing statements
executed by the Borrower and Metro-Tel shall have been duly executed and
delivered to Lender in a form appropriate for recordation or filing in the
manner and places required by law to establish, preserve, protect and perfect
the interests and rights created or intended to be created by this Agreement and
any other Security Agreement; and all taxes, fees and other charges in
connection with the execution, delivery and filing of this Agreement, each
Security Agreement and the financing statements shall duly have been paid.
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(f) Landlord's Waivers; Mortgagee's Waivers. The
Lender shall have received, in form and content satisfactory to Lender (i)
waivers from all lessors that might have landlord's Liens on any Collateral and
(ii) waivers from all mortgagees of the Borrower's and Metro-Tel's premises in
which any Collateral is located.
(g) Swap Agreement. The Borrower shall have executed
and delivered to the Lender the Interest Rate Swap Agreement, if the Borrower
desires to do so.
(h) Taxes and Expenses. All taxes, fees and other
charges in connection with the execution, recordation, filing, registration and
delivery hereof shall have been paid.
(i) Merger. The merger ("Merger") contemplated by the
Agreement and Plan of Merger, dated as of July 1, 1998, to which Borrower and
Metro-Tel are parties ("Merger Agreement") shall have been consummated in a
manner and on terms and conditions satisfactory to Lender.
(j) Commitment Fee and Expenses. Borrower shall pay
Lender at closing a (i) commitment fee of $14,500, (ii) all reasonable costs and
expenses incurred by Lender in connection herewith and (iii) a $450 out-of-state
closing fee.
(k) Interim Financial Statements. The most current
interim financial statements of Borrower and Metro-Tel shall have been delivered
to Lender and shall be satisfactory to Lender.
(l) SEC Filings. All of Metro-Tel's filings with the
Securities and Exchange Commission since January 1, 1998 shall have been
received by and shall be satisfactory to Lender.
(m) Trade References. Metro-Tel shall have provided
such trade and credit references to Lender as Lender shall request, which shall
be satisfactory to Lender.
4.2. Conditions Precedent to Each Advance of a Loan or Issuance
of a Letter of Credit or Purchasing Forward Exchange. In addition to any other
requirement or condition precedent set forth herein, Lender shall not be
required to make any advance of any Loan or issue any Letter of Credit or enter
into any Spot or Forward transaction unless and until, in the sole discretion of
Lender, each of the following conditions shall have been satisfied:
(a) Prior Conditions. At or prior to Closing,
Borrower shall have satisfied (i) all conditions precedent set forth in Section
4.1, and (ii) all conditions precedent set forth elsewhere in this Agreement and
in any other Loan Document.
(b) Advance Request. Borrower shall have delivered to
the Lender an Advance Request and Borrowing Base Certificate and other
information, in such form and containing such information as Lender shall
request.
(c) No Default. No Default or Event of Default shall
have occurred or will occur upon the making of the advance or the issuance of
the Letter of Credit in question and Borrower shall have delivered to Lender an
officer's certificate to such effect, which may be incorporated in the advance
request.
(d) Correctness of Representations and Compliance
with Covenants. All representations and warranties made by Borrower and each
Guarantor herein or otherwise in writing in connection herewith shall be true
and correct in all material respects (except where such representations and
warranties are subject to a materiality caveat, in which case they shall be true
and correct in all respects, and except where such representations and
warranties are made as of a particular date, in which case, they shall be true
and correct as of such date) with the same effect as though the representations
and warranties had been made on and as of the proposed Advance Date, and
Borrower and each Guarantor shall have delivered to Lender an officer's
certificate to such effect, which may be incorporated in the Advance Request.
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Borrower and each Guarantor shall have complied in all material respects (except
where such covenants are subject to a materially caveat, in which case they
shall have been complied with in all respects) with all of its covenants and
agreements set forth in any Loan Document, and Borrower and each Guarantor shall
have delivered to Lender an officer's certificate to such effect, which may be
incorporated in the Advance Request.
(e) No Injunction, Etc. 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 the consummation of the transactions
contemplated hereby, or which, in the Lender's reasonable discretion, would make
it inadvisable to consummate any transactions contemplated by this Agreement.
(f) No Adverse Change. There shall have been no
material adverse change in the management, business, operations, condition,
assets or prospects of the Borrower or Metro-Tel from such condition as it
existed on the date of the most recent financial statements of such Person
delivered to the Lender prior to the date hereof, and no Material Adverse Effect
shall have occurred.
(g) Further Assurances. Borrower shall have delivered
such further documentation, opinions, certificates, agreements and assurances as
Lender may reasonably require.
4.3. Waiver of Conditions Precedent. If the Lender makes any
Loan or issues any Letter of Credit or enters into any Forward or Spot
transaction hereunder prior to the fulfillment of any of the conditions
precedent set forth in this Section 4, the making of such Loan or the issuance
of such Letter of Credit shall constitute only an extension of time for the
fulfillment of such condition and not a waiver thereof, and the Borrower shall
thereafter fulfill each such condition promptly.
5. Covenants of the Borrower. The Borrower covenants and agrees that
from the date hereof and until payment in full of the Indebtedness unless the
Lender shall otherwise consent in writing, the Borrower covenants and agrees as
follows:
5.1. Use of Loan Proceeds. The proceeds of the Loans shall be
used only for the purposes permitted herein and Borrower shall furnish the
Lender all evidence that it may require with respect to such use.
5.2. Maintenance of Business and Properties. Borrower and
Metro-Tel shall at all times maintain, preserve and protect all Collateral and
all the remainder of their respective properties used or useful in the conduct
of their respective business, and keep the same in good repair, working order
and condition, and from time to time make, or cause to be made, all material
needful and proper repairs, renewals, replacements, betterments and improvements
thereto so that the business carried on in connection therewith may be conducted
properly and in accordance with standards generally accepted in businesses of a
similar type and size at all times, and maintain and keep in full force and
effect all licenses and permits necessary to the proper conduct of their
respective businesses.
5.3. Insurance. Borrower and Metro-Tel shall maintain and pay
for insurance upon all Collateral, wherever located, and otherwise covering
casualty, hazard, workers' compensation, business interruption, public liability
and such other risks (as is customary in the businesses in which Borrower and
Metro-Tel are engaged) and in such amounts and with such insurance companies as
shall be reasonably satisfactory to the Lender and in compliance with law. The
Borrower and Metro-Tel shall deliver such certificates of insurance to the
Lender with loss payable endorsements naming the Lender as loss payee thereunder
in form reasonably satisfactory to the Lender. Borrower and Metro-Tel shall
maintain and pay for insurance in such amount, with such companies and in such
form as shall be reasonably satisfactory to the Lender insuring the Borrower and
Metro-Tel against any claims, suits, loss or damages suffered by any Person on
any property owned or leased by the Borrower and Metro-Tel and against such
other casualties and contingencies as is customary in the business in which the
Borrower or Metro-Tel is engaged, and deliver such certificates of insurance to
the Lender with satisfactory endorsements naming the Lender as additional
insured thereunder. Each policy of insurance
19
shall contain a clause requiring the insurer to give not less than thirty (30)
days' prior written notice to the Lender before any cancellation of the policies
for any reason whatsoever and a clause that the interest of the Lender shall not
be impaired or invalidated by any act or neglect of the Borrower or Metro-Tel or
the owner of the property nor by the occupation of the premises wherein such
property is located for purposes more hazardous than are permitted by said
policy. The Borrower hereby directs all insurers under such policies of
insurance on the Collateral to pay all proceeds payable thereunder directly to
the Lender following an Event of Default. The Borrower hereby irrevocably makes,
constitutes and appoints the Lender (and all officers, employees or agents
designated by the Lender) as the Borrower's true and lawful attorney (and
agent-in- fact) for the purpose of making, settling and adjusting claims under
such policies of insurance, endorsing the name of the Borrower on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect to such
policies of insurance; provided, however, that such power shall not be used
until after the occurrence of and during the continuation of an Event of
Default. Prior to the occurrence of an Event of Default, neither the Borrower
nor Metro-Tel will make, settle or adjust any material claim without the prior
written consent of the Lender, which consent will not be unreasonably withheld.
If the Borrower fails to obtain and maintain any of the policies of insurance or
to pay any premium in whole or in part, then the Lender may, at the Borrower's
expense, without waiving or releasing any obligation or default by the Borrower
hereunder, procure the same, but shall not be required to do so. All sums so
disbursed by the Lender, including attorneys' fees, court costs, expenses and
other charges related thereto, shall be payable on demand by the Borrower to the
Lender and shall be additional Indebtedness hereunder secured by the Collateral.
5.4. Notice of Default. Borrower shall provide to the Lender
immediate notice of (a) the occurrence of a Default or an Event of Default, (b)
any material threatened or pending litigation or material changes in existing
litigation or any material judgment against it or its assets or any Guarantor or
any Guarantor's assets, (c) any material damage or loss to property or material
labor controversy with respect to Borrower or any Guarantor, (d) any notice from
taxing authorities as to claimed deficiencies or any tax Lien or any notice
relating to alleged ERISA violations, (e) any Reportable Event, as defined in
ERISA, (f) any rejection, return, offset, dispute, loss or other circumstance
reasonably likely to have a material adverse effect on the Collateral (or
Lender's Lien or priority therein) or the Borrower or any Guarantor or their
respective businesses, operations, conditions, properties or prospects, (g) any
loss or threatened loss of material licenses or permits, (h) any notice of any
material violation of any law, rule or regulations and (i) the occurrence of any
event which is reasonably likely to have a Material Adverse Effect.
5.5. Inspections. Each of Borrower and Metro-Tel shall permit
inspections of the Collateral and the records pertaining thereto, at such
reasonable times and in such manner as may be reasonably required by the Lender
and shall further permit such inspection, review and audits of its other records
and its properties (with such frequency and at such times as the Lender may
reasonably request) by the Lender as the Lender may reasonably deem necessary or
desirable from time to time. The reasonable cost of such audits, reviews and
inspections shall be borne by the Borrower.
5.6. Financial Information. Each of Borrower and Metro-Tel
shall maintain its books and records in accordance with GAAP and shall furnish
to Lender the following periodic information in form reasonably satisfactory to
Lender:
(a) Within fifty (50) days after the close of each
fiscal quarter, beginning with the current fiscal quarter, consolidated and
consolidating balance sheets of the Borrower and Metro-Tel as of the close of
such quarter, and consolidated and consolidating statements of income and cash
flows (along with supporting schedules and in detail reasonably acceptable to
Lender) for such quarter and for that portion of the fiscal year to date then
ended, prepared in accordance with GAAP (subject to ordinary course,
non-material audit and year-end adjustments), applied on a basis consistent with
that of the preceding period or containing disclosure of the effect on the
financial position or results of operations of any change in the application of
accounting principles and practices during the period, and certified by the
Chief Financial Officer of the Borrower; and within thirty (30) days after the
close of each quarter, beginning with the current quarter, agings of Accounts of
Borrower by invoice date (including summary reports as prepared by Borrower) and
an inventory listing of Borrower, all in such detail and with such supporting
schedules and information as shall be reasonably required by Lender;
20
(b) Within one hundred twenty (120) days after the
close of each fiscal year of the Borrower and Metro-Tel audited consolidated and
consolidating balance sheets of the Borrower and Metro-Tel as of the close of
such fiscal year and audited consolidated and unaudited consolidating statements
of income and retained earnings and cash flows, for the fiscal year then ended,
prepared in accordance with GAAP, applied on a basis consistent with the
preceding year or containing disclosure of the effect on financial position or
results of operation of any change in the application of accounting principles
and practices during the year, and (i) accompanied by a report thereon (from
Borrower's or Metro-Tel's existing independent certified public accounting firm
or another regional or national accounting firm reasonably acceptable to
Lender), containing an unqualified opinion, without scope limitations imposed by
the Borrower or Metro-Tel, from such firm, and (ii) within thirty (30) days
after delivery of the financial statements required under this subsection (b), a
copy of each "management letter", if any, from such accountants to the Borrower
or Metro-Tel in connection with such accountants' audit and management-prepared
financial projections with respect to next fiscal year, in form and detail
reasonably acceptable to Lender, along with such supporting schedules and other
information and certificates as Lender shall reasonably request.
(c) Concurrently with the delivery of the financial
statements described in subsection (b) above, a certificate from the firm of
independent certified public accountants that in making their examination of the
financial statements of the Borrower and Metro-Tel, no knowledge of the
occurrence or existence of any Default or any Event of Default, was disclosed by
their examination or a statement specifying the nature and period of existence
of any such condition or event;
(d) Concurrently with the delivery of the financial
statements described in subsections (a) and (b) above, a certificate from the
Chief Financial Officer of the Borrower certifying to the Lender on behalf of
Borrower that to the best of his knowledge, each of the Borrower and Metro-Tel
has kept, observed, performed and fulfilled each and every covenant, obligation
and agreement binding upon the Borrower or Metro-Tel contained in this Agreement
and the other Loan Documents, and that no Default or Event of Default has
occurred or specifying any such Default or Event of Default, together with
financial covenant compliance worksheet, in form satisfactory to the Lender,
reflecting the computation of the financial covenants set forth in Section 5.25
hereof as of the end of the period covered by such financial statements;
(e) Upon the Lender's written request, such other
information about the Collateral or the financial condition and operations of
the Borrower as the Lender may from time to time reasonably request. The Lender
may reasonably require more frequent rendering of the reports and certificates
described in (a) through (d) above.
(f) Simultaneously with filing thereof with any
governmental authority, Borrower shall deliver to Lender copies of Borrower's
and Metro-Tel's federal, state and local income tax returns, as applicable.
(g) Within 45 days after the close of each month,
beginning with the current month, a Borrowing Base Certificate substantially in
the form of Exhibit A ("Borrowing Base Certificate"), along with the latest
month-end accounts receivable aging report and within 45 days after the close of
each quarter beginning with the current quarter, a current inventory listing, in
each case certified as true and correct by Borrower's Chief Financial Officer.
(h) Within two Business Days after any report or
filing is made with the Securities and Exchange Commission by Metro-Tel, a copy
of such report or filing.
(i) Within two Business Days after any written
communication is sent to Metro-Tel's shareholders, a copy of such
correspondence.
5.7. Year 2000 Compatibility. Borrower and Metro-Tel shall take
all action necessary to assure that Borrower's and Metro-Tel's computer-based
systems are able to operate and effectively process data including dates on and
after January 1, 2000. At the request of Lender, Borrower shall provide Lender
assurance acceptable to Lender of Borrower's and Metro-Tel's year 2000
compatibility.
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5.8. Liens. Neither Borrower nor Metro-Tel shall create or
permit to exist any Liens on any of the Collateral, except Permitted Liens.
5.9. Redemptions. Neither Borrower nor Metro-Tel shall
purchase, redeem or otherwise acquire any stock or other equity interests; and
neither of them shall declare or pay any dividend or distribution that would be
reasonably likely to cause Borrower to not comply at any time with Section 5.25.
5.10. Merger, Sale, Etc. Each of Borrower and Metro-Tel shall
maintain its corporate existence, good standing and necessary qualifications to
do business, and shall not, except as expressly agreed to by Lender in writing,
(i) merge or consolidate with or into any Person or acquire all or substantially
all of the assets of, or any equity interest of, any Person, (ii) permit any
Person to transfer to it, directly or indirectly, any of its issued and
outstanding stock or securities (except as permitted in Section 5.11), or (iii)
permit the sale, lease, assignment or other disposition of any Collateral or any
of its or Metro-Tel's other assets (other than sales of obsolete or worn-out
Equipment and sales of Inventory in the ordinary course of business consistent
with past practices or other than sales of Equipment for less than $50,000 in
the aggregate in any fiscal year).
5.11. Loans, Guaranties and Other Investments. Neither Borrower
nor Metro-Tel shall make or permit to exist any advances or loans to, or
guarantee or become contingently liable, directly or indirectly, in connection
with the obligations, leases, stock or dividends of, or own, purchase or make
any commitment to purchase any stock, bonds, notes, debentures or other
securities of, or any interest in, or make any capital contributions to (all of
which are sometimes collectively referred to herein as "Investments"), any
Person except for (a) purchases of direct obligations of the federal government,
(b) deposits in commercial banks, (c) commercial paper of any U.S. corporation
having at least an A rating by Xxxxx'x Investors Service, Inc. or Standard &
Poor's Corporation, (d) endorsement of negotiable instruments for collection in
the ordinary course of business, (e) advances in the ordinary course of the
Borrower's and Metro-Tel's business not in the aggregate in excess of $50,000,
or (f) overnight bank repurchase agreements.
5.12. Change in Business. Neither Borrower nor Metro-Tel shall,
except as expressly agreed to in writing by Lender, enter into any business
which is substantially different from the business or businesses in which it is
presently engaged.
5.13. Accounts. Neither Borrower nor Metro-Tel shall sell,
assign or discount any of its Accounts or Chattel Paper or any promissory notes
held by it other than the discount of such notes in the ordinary course of
business for collection; and Borrower shall notify Lender promptly in writing of
any discount, offset or other deductions not shown on the face of an Account of
Borrower or Metro Tel invoice in excess of $50,000 and any dispute over any
Account in excess of $50,000, and any information known to Borrower relating to
any material adverse change in any Account Debtor's financial condition or
ability to pay its obligations.
5.14. Transactions with Affiliates. Except as set forth on
Schedule 5.14, neither Borrower nor Metro-Tel shall, directly or indirectly
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with, in the ordinary course of business or
otherwise, any Affiliate; provided, however, that any acts or transactions
prohibited by this Section 5.14 may be performed or engaged in, after written
notice to the Lender, if upon terms not less favorable to the Borrower than if
no such Affiliate relationship existed.
5.15. No Change in Name or Offices; Removal of Collateral.
Neither Borrower nor Metro-Tel shall, (a) change its name or the location of its
chief executive office or other office where books or records are kept or (b)
permit any Inventory or other tangible Collateral to be located at any location
other than as specified on Schedule 2.9.
5.16. No Sale, Leaseback. Neither Borrower nor Metro-Tel shall
enter into any sale-and-leaseback or similar transaction.
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5.17. Margin Stock. Neither Borrower nor Metro-Tel shall use
any proceeds of any Loan to purchase or carry any margin stock (within the
meaning of Regulation U of the Board of Governors of Federal Reserve System) or
extend credit to others for the purpose of purchasing or carrying any margin
stock.
5.18. Payment of Taxes, Etc. Neither Borrower nor Metro-Tel
shall pay before delinquent all of its debts and taxes except that the Lender
shall not unreasonably withhold its consent to nonpayment of taxes being
actively contested in good faith and in accordance with law (provided that the
Lender may require bonding or other assurances of any amount in excess of
$50,000).
5.19. Comply with ERISA. Each of Borrower and Metro-Tel shall
at all times make prompt payment of contributions required to meet the minimum
funding standards set forth in ERISA with respect to any employee benefit plan;
promptly after the filing thereof, furnish to the Lender copies of any annual
report required to be filed under ERISA in connection with each employee benefit
plan; not withdraw from participation in, permit the termination or partial
termination of, or permit the occurrence of any other event with respect to any
employee benefit plan that could result in liability to the Pension Benefit
Guaranty Corporation; notify the Lender as soon as practicable of any Reportable
Event and of any additional act or condition arising in connection with any
employee benefit plan which the Borrower believes might constitute grounds for
the termination thereof by the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States district court of a trustee to
administer such plan; and furnish to the Lender upon the Lender's request, such
additional information about any employee benefit plan as may be reasonably
requested.
5.20. Compliance; Hazardous Materials. Except as disclosed on
Schedule 2.17, each of Borrower and Metro-Tel shall comply with all laws,
regulations, ordinances and other legal requirements, specifically including,
without limitation, ERISA, all securities laws and all laws relating to
hazardous materials and the environment. Neither Borrower nor Metro-Tel shall
engage in the storage, manufacture, disposition, processing, handling, use or
transportation of any hazardous or toxic materials, not in compliance with
applicable laws and regulations.
5.21. Subsidiaries. Neither Borrower nor Metro-Tel shall
acquire or form any Subsidiary.
5.22. Compliance with Assignment Laws. Each of Borrower and
Metro-Tel shall, if reasonably required by the Lender, comply with the Federal
Assignment of Claims Act and any other applicable law relating to assignment of
government contracts and Accounts arising from the performance thereof.
5.23. Further Assurances. Each of the Borrower and Metro-Tel
shall take such further action and provide to the Lender such further assurances
as may be reasonably requested by the Lender to ensure compliance with the
intent of this Agreement and the other Loan Documents.
5.24. Withholding Taxes. Each of Borrower and Metro-Tel shall
pay as and when due all employee withholding, FICA and other payments required
by federal, state and local governments with respect to wages paid to employees.
5.25. Financial Covenants. Borrower and Metro-Tel shall at all
times be in compliance with the following financial covenants:
(a) Debt Service Coverage Ratio. As of the last day
of each fiscal year of Borrower and Metro-Tel, Borrower shall not permit the
ratio of (i) the sum of consolidated net income after tax for the fiscal year
then ended plus consolidated depreciation and amortization for the fiscal year
then ended less dividends declared or paid by Metro-Tel for the fiscal year then
ended to (ii) current maturities of long-term debt (including capitalized leases
and excluding Revolving Loans) to be less than 1.25 to 1.0.
(b) Leverage. Borrower shall not, at any time, permit
the ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth,
to exceed 2.0 to 1.0.
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5.26. Lender Account. Borrower shall, at all times, maintain
with Lender its primary operating and depository account including cash
management accounts.
5.27. Fiscal Year; Accounting Method. Neither Borrower nor
Metro-Tel shall change its fiscal year, or change its method of accounting to a
method inconsistent with current practices (except for the change of Borrower's
fiscal year to that of Metro-Tel's after written notice thereof to Lender).
5.28. Default on Other Obligations. Neither Borrower nor
Metro-Tel shall default on any material contract or obligation to any other
Person nor shall either of them default in the timely and due performance of any
material obligation to any other Person relating to indebtedness for borrowed
money.
5.29. SEC Filing. Metro-Tel shall timely file with the
Securities and Exchange Commission all filings and reports required by Sections
12 and 15 of the Securities Act of 1933, as amended, and under applicable law in
order for it to continue to be a public company, and no such filings and reports
will contain any untrue statement of a material fact or omit a material fact
necessary to make the statement made therein not misleading.
5.30. Compliance with Laws. Borrower and Metro-Tel shall, in
all material respects, at all times operate their business in accordance with
(and otherwise be in material compliance with) all applicable laws, rules and
regulations.
5.31. Merger Agreement. Without Lender's prior written consent,
neither Borrower nor Metro- Tel shall amend or otherwise modify the Merger
Agreement.
5.32. Chattel Paper. Neither Borrower nor Metro-Tel nor any of
their customers shall execute any security agreement, note or other instrument,
agreement or document evidencing or securing any sale by Borrower or Metro-Tel,
unless such security agreement, note or other instrument, agreement or document
constitutes Chattel Paper; and none of Borrower's or Metro-Tel's Accounts or
other receivables shall be represented by any security agreement, note or other
instrument, agreement or document unless it is Chattel Paper.
6. Default.
6.1. Events of Default. Each of the following shall constitute
an Event of Default:
(a) Any representation or warranty made by the
Borrower or any Guarantor in any Loan Document or in any certificate or report
furnished in connection herewith or therewith shall have been untrue or
incorrect in any material respect when made; or
(b) There shall occur any failure by the Borrower or
any Guarantor in the payment, when due, of any principal of or interest on any
Note, or under any other Loan Document; or Borrower shall fail to pay on demand
any returned or dishonored draft, check or other item which has been presented
to Lender and for which Borrower has received provisional credit; or
(c) There shall occur (i) any default by the Borrower
or any Guarantor in the performance of any agreement, covenant or obligation
contained in this Agreement or any other Loan Document not provided for
elsewhere in this Section 6.1 and such Default or other default is not cured
within seven Business Days of notice from Lender, or (ii) a "Potential Event of
Default" or "Event of Default", as such terms are defined in the Interest Rate
Swap Agreement, if an Interest Rate Swap Agreement has been executed; or
(d) The Borrower or any Guarantor shall be in default
under any Debt owed to any other obligee in an amount in excess of $50,000,
which default entitles the obligee to accelerate any such Debt or exercise other
remedies with respect thereto; or
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(e) The Borrower or any Guarantor shall (i)
voluntarily liquidate or terminate operations or apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of Borrower or any Guarantor or of all or of a substantial part of
its assets, (ii) admit in writing its inability, or be generally unable, to pay
its debts as the debts become due, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under any federal
bankruptcy law (as now or hereafter in effect), (v) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, or (vi) take
any corporate action for the purpose of effecting any of the foregoing; or
(f) Without its application, approval or consent, a
proceeding shall be commenced and remain undismissed or unstayed for more than
60 days, in any court of competent jurisdiction, seeking, in respect of the
Borrower or any Guarantor, any remedy under any federal bankruptcy law, or any
law pertaining to liquidation, reorganization, dissolution, winding-up, or
composition or readjustment of debt, or seeking the appointment of a trustee,
receiver, liquidator or the like with respect to the Borrower or any Guarantor,
or any of its assets or other like relief under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts;
or
(g) Any Lien of the Lender hereunder or under any
other Security Agreement shall not constitute a perfected first priority Lien in
the Collateral thereby encumbered, subject only to Permitted Liens; or
(h) A judgment, writ of garnishment or attachment in
excess of $50,000 shall be rendered against the Borrower or any Guarantor or any
of its assets and shall remain undischarged, undismissed and unstayed for more
than 20 days; or
(i) The Borrower or any Guarantor is enjoined,
restrained or in any way prevented by the order of any court or governmental
entity from conducting any material part of its business; or
(j) The Borrower or any Guarantor shall cease to be
Solvent, or ceases to conduct any material part of its business as now
conducted; or
(k) There shall occur any Material Adverse Effect; or
(l) A notice of lien, levy or assessment is filed of
record with respect to all or any portion of the Borrower's or any Guarantor's
assets by the United States, or any department, agency or instrumentality
thereof, or by any state, county, municipal or other governmental agency, or if
any taxes or debts in excess of $50,000 owing at any time or times hereafter to
any one of them becomes a Lien upon the Collateral or any other asset of the
Borrower or any Guarantor and the same is not dismissed, released, discharged,
or bonded in a manner satisfactory to Lender within 10 days after the same
becomes a Lien or, in the case of ad valorem taxes, prior to the last day when
payment may be made without penalty; or
(m) Any of the Loan Documents for any reason ceases
to be in full force and effect or is declared to be null and void, or the
Borrower or any Guarantor denies that it has any further liability (including,
but not limited to any full or partial repudiation or revocation of any
Guaranty) under any Loan Document to which it is a party, or gives notice to
such effect; or
(n) The loss, suspension or revocation of, or failure
to renew, any material license or permit now held or hereafter acquired by the
Borrower or any Guarantor; or
(o) The occurrence of any of the following events:
(i) the happening of a Reportable Event with respect to any profit sharing or
pension plan of the Borrower or any Guarantor governed by ERISA which has a
Material Adverse Effect; (ii) the termination of any such plan which has a
Material Adverse Effect; (iii) the appointment of a trustee by an appropriate
United States District Court to administer any such plan; or (iv) the
institution of any
25
proceedings by the Pension Benefit Guaranty Corporation to terminate any such
plan or to appoint a trustee to administer any such plan;
(p) The occurrence of any material casualty or damage
to Collateral; or
(q) Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx shall fail to
own (beneficially and of record) in the aggregate, at least 51% of each
outstanding class and series of Metro-Tel's equity securities (including all
securities convertible into equity securities); or any Person other than
Metro-Tel shall own (beneficially or of record) any of Borrower's equity
securities (including all securities convertible into equity securities).
6.2. Acceleration of the Indebtedness. Without in any way
limiting the right of the Lender to demand payment of any portion of the
Indebtedness (a) upon and after an Event of Default (other than an Event of
Default specified in Subsections 6.1(e) or (f)), all of the Indebtedness may, at
the option of the Lender, and without notice or legal process of any kind, be
declared, and immediately shall become, due and payable, and (b) Borrower upon
and after the occurrence of an Event of Default specified in Subsections 6.1(e)
or (f), all of the Indebtedness shall automatically become due and payable,
without demand, notice or legal process of any kind, anything in any Note or
other instrument or document evidencing any such Indebtedness or in the Loan
Documents or in any other agreement to the contrary notwithstanding. If any
Default or Event of Default occurs, Lender shall have no obligation to make any
additional advances of Loans or issue or accept additional Letters of Credit or
enter into any further Spot or Forward transactions.
6.3. Default Rate. Upon the occurrence and during the
continuation of an Event of Default, all of the Indebtedness shall bear interest
at the Default Rate.
6.4. Rights and Remedies. Upon and after the occurrence of any
Event of Default, the Lender shall have, in addition to all other rights and
remedies which the Lender may have under this Agreement, the other Loan
Documents, and applicable law, the following rights and remedies, all of which
may be exercised with or without further notice to the Borrower: (a) all of the
rights and remedies of a secured party under applicable law; (b) to foreclose
the Liens created under this Agreement and the other Loan Documents or under any
other agreement relating to the Collateral, by any available judicial procedure
or without judicial process; (c) to enter any premises where the Collateral may
be located, through self-help and without judicial process, without first
obtaining a final judgment or giving the Borrower notice and opportunity for a
hearing on the validity of the Lender's claim, for the purpose of taking
possession or removing the same; and/or (d) to sell, assign, lease, or otherwise
dispose of the Collateral or any part thereof, either at public or private sale,
in lots or in bulk, for cash, on credit or otherwise, with or without representa
tions or warranties, and upon such terms as shall be acceptable to the Lender,
in its sole discretion, and the Lender may bid or become the purchaser at any
such public sale, free from any right of redemption which is hereby expressly
waived by the Borrower, and the Lender shall have the option to apply or be
credited with the amount of all or any part of the Indebtedness against the
purchase price bid by the Lender at any such sale. The Borrower agrees that the
Lender has no obligation to preserve rights to the Collateral against prior
Persons or to xxxxxxxx any Collateral for the benefit of any Person. The Lender
is hereby granted a license or other right to use, without charge, the
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and the Borrower's rights under
all licenses and franchise agreements shall inure to the Lender's benefit; and
in each instance, Lender shall only utilize such license after the occurrence of
an Event of Default. In addition, the Borrower agrees that in the event notice
is necessary under applicable law, written notice mailed to the Borrower in the
manner specified herein five days prior to the date of public sale of any of the
Collateral or prior to the date after which any private sale or other
disposition of the Collateral will be made shall constitute commercially
reasonable notice to the Borrower. Upon the occurrence of an Event of Default,
the Lender shall also have the right to seek the appointment of a receiver to
take possession of and operate and dispose of Borrower's assets. The Lender may,
at any time during the continuance of an Event of Default, and at Borrower's
expense, employ and maintain custodians at the Borrower's premises who shall
have full authority to protect Lender's interests. Upon the occurrence and
during the continuation of an Event of Default, the Borrower authorizes the
Lender to collect
26
and set-off and apply against the Indebtedness when due any cash or deposit
accounts in its possession, and any refund of insurance premiums or any
insurance proceeds payable on account of the loss or damage to any of the
Collateral and irrevocably appoints the Lender as its attorney-in-fact to
endorse any check or draft or take other action necessary to obtain such funds.
All or any part of the Collateral may be liquidated and sold by Lender for
failure of Borrower to pay any of the Indebtedness, regardless of whether any of
the Loans have been accelerated or whether the Interest Rate Swap Agreement has
been terminated early. Notwithstanding anything to the contrary set forth
herein, Collateral may be liquidated upon Borrower's failure to pay any
Indebtedness on a timely basis, whether or not any acceleration has occurred or
the Interest Rate Swap Agreement has been terminated early.
6.5. Application of Proceeds. After an Event of Default, the
net cash proceeds resulting from the collection, liquidation, sale, lease or
other disposition of the Collateral shall be applied first to the expenses
(including all reasonable attorneys' fees) of retaking, holding, storing,
processing and preparing for sale, selling, collecting, liquidating and the
like, and then to the satisfaction of all Indebtedness. The Borrower irrevocably
waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by the Lender from or on
behalf of the Borrower, and the Borrower does hereby irrevocably agree that the
Lender shall have the continuing exclusive right to apply and to reapply any and
all such payments and collections received at any time or times hereafter by the
Lender or its agent against the Indebtedness which is due and payable at the
time of such application, in such manner as the Lender, in its sole discretion,
may determine, notwithstanding any entry by the Lender upon any of its books and
records. The Borrower shall be liable to the Lender and shall pay to the Lender
on demand any deficiency which may remain after such sale, disposition,
collection or liquidation of the Collateral. The Lender shall remit to the
Borrower or the Person entitled thereto any surplus remaining after all
Indebtedness have been paid in full. If any of the Collateral shall require
repairs, maintenance, preparation or the like, or is in process or other
unfinished state, the Lender shall have the right, but shall not be obligated to
perform such repairs, maintenance, preparation, processing or completion of
manufacturing for the purpose of putting the same in such saleable form as the
Lender shall deem appropriate, but the Lender shall have the right to sell or
dispose of the Collateral without such processing. The Borrower will, at the
Lender's request, assemble all the Collateral and make it available to the
Lender at places which the Lender may select, whether at premises of the
Borrower or elsewhere, and will make available to the Lender all premises and
facilities of the Borrower for the purpose of the Lender's taking possession of
the Collateral or of removing or putting the Collateral in saleable form.
6.6. Appointment of the Lender as the Borrower's Lawful
Attorney. The Borrower hereby irrevocably designates, makes, constitutes and
appoints the Lender (and all Persons designated by the Lender) as the Borrower's
true and lawful attorney (and agent-in-fact) and the Lender, or the Lender's
agent, may, upon and after the occurrence and during the continuation of an
Event of Default, in the Borrower's or the Lender's name: (i) exercise all of
the Borrower's rights and remedies with respect to the Accounts and the other
Collateral; (ii) take control, in any manner, of any item of payment or
proceeds; (iii) prepare, file and sign the Borrower's name on a proof of claim
in bankruptcy or similar document against any Account Debtor; (iv) do all acts
and things necessary, in the Lender's sole discretion, to fulfill the Borrower's
obligations under this Agreement; (v) endorse the name of the Borrower upon any
of the items of payment or proceeds referred to herein and deposit the same to
the account of the Lender on account of the Indebtedness; (vi) endorse the name
of the Borrower upon any chattel paper, document, instrument, invoice, freight
xxxx, xxxx of lading or similar document or agreement relating to the Accounts
or Inventory; (vii) use the Borrower's stationery and sign the name of the
Borrower to verifications of the Accounts and notices thereof to Account
Debtors; and (viii) use the information, recorded on or contained in any data
processing equipment and computer hardware and software relating to the Accounts
and Inventory to which the Borrower has access. All acts of the Lender or its
designee, except the Lender's or its designees' acts of gross negligence or
willful misconduct, taken pursuant to this Section 6.6 are hereby ratified and
confirmed and the Lender or its designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or law.
6.7 Collections; The Lender's Right to Notify Account Debtors and to
Endorse Borrower's Name. Borrower hereby authorizes Lender (1) upon the
occurrence and during the continuation of a Default or an Event of
27
Default, to open Borrower's mail and collect any and all amounts due to Borrower
from Account Debtors; (2) after the occurrence and during the continuation of a
Default or an Event of Default, notify any or all Account Debtors that the
Accounts have been assigned to Lender and that Lender has a security interest
therein; and (3) after the occurrence and during the continuation of a Default
or an Event of Default, direct such Account Debtors to make all payments due
from them to Borrower upon the Accounts directly to Lender or to a lock box
designated by Lender. Lender shall promptly furnish Borrower with a copy of any
such notice sent and Borrower hereby agrees that any such notice may be sent on
Borrower's stationery, in which event Borrower shall co-sign such notice with
Lender. Borrower irrevocably makes, constitutes and appoints Lender (and all
Persons designated by Lender for that purpose) as Borrower's true and lawful
attorney (and agent-in-fact) to endorse Borrower's name on any checks, notes,
drafts or any other payment relating to and/or proceeds of the Collateral which
come into either Lender's possession or control.
7. Security Agreement; Collateral.
7.1. Security Interest.
(a) As security for the payment and performance of
any and all of the Indebtedness and the performance of all other obligations and
covenants of the Borrower hereunder and under the other Loan Documents, absolute
or contingent, now existing or hereafter arising, which are now, or may at any
time or times hereafter be owing by the Borrower to the Lender, the Borrower
hereby pledges to the Lender and gives and grants the Lender a continuing and
general security interest in and Lien upon and right of set-off against, all
right, title and interest of the Borrower in and to the Borrower Collateral,
whether now owned or hereafter acquired by the Borrower; provided, however, that
notwithstanding anything to the contrary set forth herein, no Indebtedness shall
be secured by any real property.
(b) At the Lender's request, the Borrower shall cause
the execution and delivery to the Lender, in form and substance reasonably
satisfactory to the Lender, of all such agreements, documents, financing
statements and other writings reasonably requested by the Lender to perfect and
maintain the perfection and priority of its security interests in and Liens on
the Borrower Collateral and to consummate the other transactions contemplated
hereby, and the Borrower shall pay all filing fees and documentary stamp,
intangible and similar taxes in connection therewith. The Borrower irrevocably
designates the Lender as its attorney-in-fact to effectuate the foregoing.
(c) Except as herein or by applicable law otherwise
expressly provided, the Lender shall not be obligated to exercise any degree of
care in connection with any Borrower Collateral, to take any steps necessary to
preserve any rights in any of the Borrower Collateral or to preserve any rights
therein against prior parties. No segregation or specific allocation by the
Lender of specified items of Borrower Collateral against any liability of the
Borrower shall waive or affect any Lien against other items of Borrower
Collateral or any of the Lender's options, powers or rights under this Agreement
or otherwise arising.
(d) All collateral which the Lender may at any time
acquire from any other source as security for the payment of any Indebtedness
shall constitute cross-collateral for all Indebtedness without apportionment or
designation as to particular Indebtedness, and all Indebtedness shall be secured
by all such collateral; and the Lender shall have the right, in its sole
discretion, to determine the order in which its rights in or remedies against
such collateral are to be exercised and which types or portions of the
collateral are to be proceeded against and the order of application of proceeds
of Borrower Collateral against particular Indebtedness; provided, however, that
notwithstanding anything to the contrary set forth herein, no Indebtedness shall
be secured by any real property.
7.2. Inspection of Collateral. The Borrower hereby irrevocably
consents to any act by the Lender or its agents in entering upon any premises
for the purposes of either (i) following reasonable prior notice to Borrower
inspecting the Collateral and making extracts from and copies of any books and
records relating thereto during regular business hours or (ii) taking possession
of the Collateral at any time following the occurrence and during the
continuation of an Event of Default; and the Borrower hereby waives its right to
assert against the Lender or its agents any claim based upon trespass or any
similar cause of action for entering upon any premises where the Collateral may
be located.
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Following the occurrence and during the continuation of an Event of Default, the
Borrower irrevocably consents to the Lender's requesting information pertaining
to the Borrower from any Person and to the Lender's verifying such or any other
information pertaining to the Borrower, including, but not limited to the
amount, quality, existence, quantity, value and condition of any Account or any
other Collateral.
7.3. Other Rights. The Borrower authorizes the Lender without
affecting either the Borrower's or the Lender's obligations hereunder or under
any other Loan Document from time to time to take from any party and hold
additional collateral or guaranties for the payment of the Indebtedness or any
part thereof, and to exchange, enforce, substitute or release such collateral or
guaranty of payment of the Indebtedness or any part thereof and to release or
substitute any endorser or guarantor or any party who has given any Lien on any
collateral as security for the payment of the Indebtedness or any part thereof
or any party in any way obligated to pay the Indebtedness or any part thereof.
7.4. Tangible Collateral; Inventory. No Inventory, Equipment or
other tangible Borrower Collateral shall be commingled with, or become an
accession to or part of, any property of any other Person so long as such
property is Collateral. No tangible Borrower Collateral is or shall be allowed
to become a fixture. No tangible Collateral shall be stored with any
warehouseman, bailee or similar party.
7.5. The Lender's Payment of Claims Asserted Against the
Collateral. In the event a Lien, other than a Permitted Lien, is asserted by any
Person against the Collateral and if the Lender has given Borrower five days'
prior written notice and Borrower has failed to either (i) satisfy the Lien or
(ii) cause the Lien to be transferred to a bond acceptable to the Lender, then
the Lender may at any time after such five-day period in its discretion without
waiving or releasing any obligation, liability or duty of the Borrower under
this Agreement, the other Loan Documents or any Default or Event of Default,
pay, acquire and/or accept an assignment of such Lien. All sums paid by the
Lender in respect thereof and all costs, fees and expenses, including, without
limitation, attorneys' fees, court costs, expenses and other charges relating
thereto, which are incurred by the Lender on account thereof, shall be payable,
upon demand, by the Borrower to the Lender and shall be additional Indebtedness
hereunder secured by the Collateral.
8. Term of Agreement.
8.1. Term and Right to Terminate. Subject to the other
provisions herein, the provisions of this Agreement shall continue in full force
and effect until January 2, 2002 (the "Term"). Notwithstanding any term herein
to the contrary or any other term in any of the other Loan Documents, the
Borrower and the Lender agree that all Indebtedness hereunder shall be payable
in accordance with Section 3. Notwithstanding any provision to the contrary set
forth in any Loan Document, the Lender may terminate the financing arrangements
under this Agreement and the Notes at any time, upon notice to Borrower but
without legal process of any kind, upon the occurrence and during the
continuation of an Event of Default; provided, however, that the Lender shall
retain the right to payment of the Indebtedness in accordance with Section 3.
8.2. Effect of Termination. Without limiting the generality of
the other provisions regarding Default and acceleration hereunder, upon the
effective date of termination, all Indebtedness to the Lender, whether or not
incurred under this Agreement (and notwithstanding any term of any other Loan
Document), shall become immediately due and payable, including, but not limited
to, all Indebtedness (contingent or otherwise) with respect to any Interest Rate
Swap Agreement and all Letters of Credit and Forward and Spot transactions.
Notwithstanding any provision to the contrary in any Loan Document, and
notwithstanding any such termination, the obligations of the Borrower and the
rights, remedies and Liens of the Lender hereunder and under each Loan Document
shall remain in full force and effect until the Indebtedness is indefeasibly and
finally paid and discharged in full and all Letters of Credit and Forward and
Spot transactions and the Interest Rate Swap Agreement have been terminated or
canceled and Lender is released from all liability in connection therewith;
provided, however, that Lender shall promptly release its Liens in the
Collateral upon the indefeasible and final payment and discharge in full of all
Indebtedness.
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9. Miscellaneous.
9.1. Rights and Remedies Cumulative; Non-Waiver; Etc. The
enumeration of the Lender's rights and remedies set forth in this Agreement is
not intended to be exhaustive and the exercise by the Lender of any right or
remedy shall not preclude the exercise of any other rights or remedies, all of
which shall be cumulative, and shall be in addition to any other right or remedy
given hereunder, under the Loan Documents or under any other agreement to which
the Borrower or any Guarantor and the Lender are now or hereafter become
parties, or which may hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Lender in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude other or further exercise thereof or the exercise of any other right,
power or privilege or shall be construed to be a waiver of any Event of Default.
No course of dealing between the Borrower or any Guarantor and the Lender or the
Lender's employees shall be effective to change, modify or discharge any
provision of this Agreement or to constitute a waiver of any Event of Default.
The Lender shall not, under any circumstances or in any event whatsoever, have
any liability for any error, omission or delay of any kind occurring in the
liquidation of the Collateral or for any damages resulting therefrom except
damages directly attributable to the Lender's gross negligence or willful
misconduct.
9.2. Survival of Representations; Reinstatement of
Indebtedness. All covenants, agreements, representations and warranties made by
Borrower or any Guarantor in connection herewith shall survive the making of the
Loans hereunder and the delivery of the Notes, and shall continue in full force
and effect so long as any Indebtedness is outstanding. The Borrower further
agrees that to the extent that the Borrower makes a payment or payments to the
Lender, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, the Indebtedness or
part thereof intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been received by the Lender.
9.3. Expenses; Indemnification. Whether or not the transactions
contemplated by this Agreement shall be consummated, the Borrower will pay or
reimburse the Lender upon demand for all reasonable expenses (including, without
limitation, reasonable attorneys' and paralegals' fees, costs and expenses)
incurred or paid by the Lender in connection with: (a) the preparation,
execution and delivery of this Agreement or the other Loan Documents; (b)
charges for examiners, auditors or similar Persons whom the Lender may engage
with respect to rendering opinions concerning the Borrower's or Metro-Tel's
financial condition and the condition and value of the Collateral in accordance
with the terms hereof; (c) any arbitration, litigation, contest, dispute, suit,
proceeding, enforcement or action (whether instituted by the Lender or the
Borrower or any other Person) in any way relating to the Collateral, this
Agreement or the other Loan Documents, or the Borrower's or Metro-Tel's business
or affairs; (d) any attempt to enforce any rights of the Lender against the
Borrower or any other Person which may be obligated to the Lender by virtue of
this Agreement or the other Loan Documents, including without limitation, the
Account Debtors; (e) any attempt to inspect, verify, protect, collect, sell,
liquidate or otherwise dispose of the Collateral in accordance with the terms
hereof; (f) the filing and recording of all documents required by the Lender to
perfect the Lender's Liens in the Collateral, including without limitation, any
documentary stamp tax or any other taxes incurred because of such filing or
recording; (g) all costs incurred in connection with any lockbox; and (h) all
costs of modifying or amending any Loan Document. The Borrower shall indemnify
and hold the Lender harmless from and against any and all finder's or brokerage
fees and commissions which may be payable in connection with the transactions
contemplated by this Agreement other than any fees or commissions of finders or
brokers engaged by the Lender. If the Borrower should fail to pay any tax or
other amount required by this Agreement to be paid or which may be necessary to
protect or preserve any Collateral or the Borrower's or Lender's interests
therein, the Lender may make such payment and the amount thereof shall be
payable on demand, shall bear interest at the Default Rate from the date of
demand until paid and shall be deemed to be Indebtedness entitled to the benefit
and security of the Loan Documents. In addition, the Borrower agrees to pay and
save the Lender harmless against any liability for payment of any state
documentary stamp taxes, intangible taxes or similar taxes (including interest
or penalties, if any) and fees which may now or hereafter be determined to be
payable with respect to the execution, delivery or recording of any Loan
Document or the making of any Advance, whether originally thought to be due or
not, and regardless of any mistake of
30
fact or law on the part of the Lender or the Borrower with respect to the
applicability of such tax or fee. The provisions of this Section 9.3 shall
survive payment in full of the Loans and termination of this Agreement.
9.4. Notices. Any notice or other communication hereunder to
any party hereto shall be by hand delivery, facsimile transmission, nationally
recognized overnight courier for next business day delivery or registered or
certified mail and unless otherwise provided herein shall be deemed to have been
received when delivered personally or three days after deposit in such mail or
with such courier postage prepaid, addressed to the party at its address
specified below (or at any other address that the party may hereafter specify to
the other parties in writing):
The Lender: First Union National Bank
Portfolio Management Group
0000 X.X. 00xx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
With a copy to: Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxx & Xxxxxxxxx, P.A.
Suite 2200
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esquire
Fax: (000) 000-0000
The Borrower: Xxxxxxx-Atlantic Corp.
000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attn: President
With a copy to: Xxxxxx Xxxxxxx, Esq.
Xxxxxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax:(000) 000-0000
9.5. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Borrower and the Lender, and their
respective successors and assigns; provided that the Borrower may not assign any
of its rights or duties hereunder without the prior written consent of the
Lender and any such assignment made without such consent will be void. Nothing
in this Agreement or any other Loan Document shall prohibit or restrict Lender
from pledging or assigning the Loan Documents, including the Collateral, to any
Federal Reserve Bank in accordance with applicable law.
9.6. Counterparts; Construction; Gender. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which when taken together shall constitute but one
and the same instrument. Any telecopied version of a signature shall be deemed a
manually executed and delivered original. This Agreement shall be construed
without any presumption that it be construed against the party causing it to be
drafted. All references in this Agreement or any of the other Loan Documents to
the masculine, feminine or neuter gender shall include all such genders unless
the context clearly indicates otherwise. Each representation, warranty, covenant
and agreement set forth in any
31
Loan Document shall be construed independently. The parties acknowledge that a
Default or an Event of Default shall be deemed continuing until cured, as
determined by Lender in accordance with this Agreement or any other Loan
Document.
9.7. Powers. All powers of attorney granted to the Lender are
coupled with an interest and are irrevocable until all indebtedness is
irrevocably paid in full and Lender has no further obligations hereunder.
9.8. Approvals. If this Agreement calls for the approval or
consent of the Lender, such approval or consent may be given or withheld in the
sole credit judgment of the Lender.
9.9. Indemnification of the Lender. From and at all times after
the date of this Agreement, and in addition to all of the Lender's other rights
and remedies against the Borrower, the Borrower agrees to hold the Lender
harmless from, and to indemnify the Lender against, all losses, damages, costs
and expenses (including, but not limited to, reasonable attorneys' and
paralegals' fees, costs and expenses) incurred or paid by the Lender, whether
direct, indirect or consequential, as a result of or arising from or relating to
any suit, action or proceeding by any Person, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any Person under any
statute or regulation, including, but not limited to, any federal or state
securities or tax laws, or under any common law or equitable cause or otherwise,
arising from or in connection with the negotiation, preparation, execution or
performance of, or the financing transactions contemplated by, this Agreement
and the other Loan Documents or the Lender's furnishing of funds to the Borrower
pursuant to this Agreement; provided, however, that the foregoing
indemnification shall not protect the Lender from loss, damage, cost or expense
directly attributable to the Lender's willful misconduct or gross negligence.
All of the foregoing losses, damages, costs and expenses of the Lender shall be
payable by the Borrower upon demand by the Lender, as the case may be, and shall
be additional Indebtedness hereunder secured by the Collateral.
9.10. Waivers by the Borrower. Except as otherwise provided for
in this Agreement, the Borrower waives (a) presentment, demand and protest and
notice of presentment, protest, non-payment, maturity and all other notices; (b)
notice prior to taking possession or control of the Collateral or any bond or
security which might be required by any court prior to allowing the Lender to
exercise any of its remedies; and (c) the benefit of all valuation, appraisement
and exemption laws. The Borrower consents to all extensions of time, renewals
and postponements of time of payment with respect to any Loan Document from time
to time prior to or after the end of the Term or any Default or Event of
Default, without notice, consent or consideration to any of the foregoing.
9.11. Lawful Charges; Late Charge. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to the
Loans, together with all fees, charges and other amounts which are treated as
interest on the Loans under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender in accordance with applicable
law, the rate of interest payable in respect of the Loans, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate, and,
to the extent lawful, the interest and Charges that would have been payable in
respect of the Loans but were not payable as a result of the operation of these
provisions shall be cumulated and the interest and Charges payable to the Lender
in respect of other Indebtedness or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Adjusted LIBOR Market Index Rate to the date of repayment, shall
have been received by the Lender. A late charge of five percent of any payment
required hereunder shall be imposed on each and every payment, including the
final payment due hereunder, not received by the Lender within 10 days after it
is due. The late charge is not a penalty, but liquidated damages to defray
administrative and related expenses due to such late payment. The late charge
shall be immediately due and payable and shall be paid by the Borrower to the
Lender without notice or demand. This provision for a late charge is not and
shall not be deemed a grace period, and Lender has no obligation to accept a
late payment. Further, the acceptance of a late payment shall not constitute a
waiver of any Default or other default then existing or thereafter arising under
any Loan Document.
9.12. Amendment. This Agreement and the other Loan Documents
cannot be amended, changed, discharged or terminated orally, but only by an
instrument in writing signed by the Lender and the Borrower.
32
9.13. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
9.14. Entire Agreement. This Agreement and the other documents,
certificates and instruments referred to herein constitute the entire agreement
between the parties and supersede and rescind any prior agreements relating to
the subject matter hereof. In the event of any conflict between the terms of any
other Loan Document and the terms of this Agreement, the terms of this Agreement
shall govern.
9.15. Separate Legal Counsel. Each Borrower and each Guarantor
has been represented by its own legal counsel (and not that of the Lender) in
connection with the negotiation and documentation of the Loan Documents.
9.16. Right of Setoff. If an Event of Default shall have
occurred and be continuing, the 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 the Lender to or for
the credit or the account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement and other Loan
Documents, irrespective of whether or not the Lender shall have made any demand
under this Agreement or such other Loan Documents and although such obligations
may be unmatured. The rights of the Lender under this Section 9.16 are in
addition to other rights and remedies (including other rights of setoff) which
the Lender may have.
9.17. Arbitration; Preservation and Limitation of Remedies.
Upon demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Agreement or any other Loan Documents ("Disputes")
between parties to this Agreement shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, disputes as to whether a matter
is subject to arbitration, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims arising out of or connected
with the transaction reflected by this Agreement. Arbitration shall be conducted
under and governed by the Commercial Financial Disputes Arbitration Rules (the
"Arbitration Rules") of the American Arbitration Association (the "AAA") and
Title 9 of the U.S. Code. All arbitration hearings shall be conducted in the
city in which the office of Lender first stated above is located. The expedited
procedures set forth in Rules 51 et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes of
limitation shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted or if such person is not available to serve, the single arbitrator
may be a licensed attorney. Notwithstanding the foregoing, this arbitration
provision does not apply to disputes under or related to the Interest Rate Swap
Agreement. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
hereto may employ or exercise freely, independently or in connection with an
arbitration proceeding or after an arbitration action is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by self-
help to exercise or prosecute the following remedies, as applicable: (i) all
rights to foreclose against any real or personal property or other security by
exercising a power of sale granted under Loan Documents or under applicable law
or by judicial foreclosure and sale, including a proceeding to confirm the sale;
(ii) all rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute. The parties agree that they shall not have a
33
remedy of punitive or exemplary damages against the other in any Dispute and
hereby waive any right or claim to punitive or exemplary damages they have now
or which may arise in the future in connection with any Dispute whether the
Dispute is resolved by arbitration or judicially.
9.18. Governing Law; Jurisdiction and Venue; Waiver of Jury
Trial. SUBJECT TO THE TERMS OF SECTION 9.17, THIS AGREEMENT SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF
THE STATE OF FLORIDA. SUBJECT TO THE TERMS OF SECTION 9.17, AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, THE BORROWER HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN DADE COUNTY, STATE
OF FLORIDA, AND CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR
CERTIFIED MAIL DIRECTED TO THE BORROWER AT THE ADDRESS STATED IN SECTION 9.4 AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER
POSTAGE PREPAID. SUBJECT TO THE TERMS OF SECTION 9.17, EACH OF THE BORROWER AND
THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
SUIT OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS. SUBJECT TO THE TERMS OF SECTION 9.17, THE BORROWER WAIVES ANY
OBJECTION WHICH THE BORROWER MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER
VENUE OR FORUM NON CONVENIENS TO ANY SUIT OR PROCEEDING INSTITUTED BY THE LENDER
UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS IN ANY STATE OR FEDERAL COURT
LOCATED WITHIN DADE COUNTY, FLORIDA AND CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. SUBJECT TO THE TERMS
OF SECTION 9.17, NOTHING IN THIS SECTION 9.18 SHALL AFFECT THE RIGHT OF THE
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF THE LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH HAS JURISDICTION OVER
THE BORROWER OR ITS PROPERTY. SUBJECT TO THE TERMS OF SECTION 9.17, THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, MAKE THE LOANS AND EXTEND THE OTHER FINANCIAL
ACCOMMODATIONS CONTEMPLATED HEREUNDER AND THEREUNDER.
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXXXX-ATLANTIC CORP.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
FIRST UNION NATIONAL BANK,
a national banking association
By: /s/ Xxxxxxx XxXxxxxx
-------------------------------
Name: Xxxxxxx XxXxxxxx
Title: SVP
35
INDEX OF SCHEDULES
Schedule 1.1 Permitted Liens
Schedule 2.8 Affiliates' Assets
Schedule 2.9 Locations
Schedule 2.17 Environmental Compliance
Schedule 5.14 Affiliated Transactions
INDEX OF EXHIBITS
Exhibit A Borrowing Base Certificate
Exhibit B Advance Request
Exhibit C Term Note
Exhibit D Revolving Credit Note
36
SCHEDULE 2.9
Any location other than those described below, as to which: (i)
Borrower has given Lender 30 days' prior written notice; (ii) all acts
have been taken (including, but not limited to, the filing of financing
statements and the execution and delivery to Lender of landlords' or
mortgagees' waivers in form and substance reasonably acceptable to
Lender) to ensure Lender's continued first priority security interest
in all Collateral located at such location; and (iii) Borrower and
Metro-Tel shall have executed all such documents and agreements as
Lender shall have reasonably requested to effectuate clause (ii),
above.
37
